Media centre /
Press release
NS&I RATE CHANGES AND NEW BONDS LAUNCH
22 February 2008
National Savings and Investments (NS&I) is decreasing the interest rates on its variable savings offers by up to 0.25% per annum.
This decrease follows the movement in the Bank of England base rate on 7 February 2008, from 5.50% to 5.25%, which has a bearing on NS&I’s variable rate products. The revised interest rates will come into effect on 22 February 2008 for all variable rate products, except for the Direct ISA which was decreased on 7 February 2008, Premium Bonds which will take effect from 1 March 2008 and Income Bonds from 6 March 2008.
Premium Bonds
The Premium Bond prize fund rate will decrease from 3.80% to 3.60% p.a. free of UK Income Tax and Capital Gains Tax. NS&I will continue to give away over one million tax-free Premium Bond prizes each month, including two £1 million jackpot prizes.
The odds of winning a prize with each £1 Premium Bond will remain at 21,000 to 1.
The effect of changes in the Premium Bond prize fund rate
|
|
February 2008
3.80% prize fund rate |
March 2008
(estimated figures)
3.60% prize fund rate |
|
Total value of prizes |
£114,253,708 |
£107,569,950 |
|
Total number of Prizes |
1,718,100 |
1,707,459 |
|
Prize fund rate |
3.80% |
3.60% |
|
Odds of winning a prize |
21,000 to 1 |
21,000 to 1 |
In addition, NS&I will launch two new fixed rate Bonds on 23 February 2008, the Guaranteed Income Bond and the Guaranteed Growth Bond.
The Guaranteed Income Bond offers customers the opportunity to receive their interest as a monthly income whilst with the Guaranteed Growth Bond customers will receive their interest at the end of their chosen investment term. Both the new Bonds will offer customers the opportunity to invest between £500 and £1 million in a fixed rate bond, with guaranteed rates of interest of between 3.85-4.05%, for either one, three or five year terms.
ENDS
Notes to editors
|
Tax-free1 variable rates |
Rate p.a.
(change in brackets) |
AER3 |
|
Cash mini ISA (new rate effective from 22 February 2008) |
4.85 %(-0.25%) |
|
|
Direct ISA (new rate effective from 7 February 2008) |
5.80% (-0.25%) |
|
|
Premium Bond prize fund (new rate effective from 1 March 2008) |
3.60% (-0.20%) |
|
| |
|
|
|
New variable rates
(gross rates2) |
Rate p.a.
(change in brackets) |
AER3 |
|
Income Bonds (new rates effective from 6 March 2008)
£25,000+
Under £25,000 |
4.95% (-0.25%)
4.70% (-0.25%) |
5.06%
4.80% |
|
Investment Account (new rates effective from 22 February 2008)
£50,000+
£25,000+
£10,000+
£5,000+
£500+
Under £500 |
4.35% (-0.25%)
4.00% (-0.25%)
3.80% (-0.25%)
3.60% (-0.25%)
3.50% (-0.25%)
3.45% (-0.25%) |
|
|
Easy Access Savings Account (new rates effective from 22 February 2008)
£50,000+
£25,000+
£10,000+
£5,000+
£1000+
Under £1000 |
4.65% (-0.25%)
4.40% (-0.25%)
4.15% (-0.25%)
3.90% (-0.25%)
3.60% (-0.25%)
2.10% (-0.25%) |
|
- Tax-free means that interest and prizes are exempt of UK income Tax and Capital Gains Tax
- Gross means the taxable rate of interest without the deduction of UK Income Tax
- AER stands for Annual Equivalent Rate and enables the comparison of interest rates from different financial institutions and across different products on a like-for-like basis. It shows what the notional annual rate would be if interest was compounded each time it was credited or paid out. Where interest is credited once a year the rate quoted and the AER will be the same
- When interest rates are set on tax-free products, NS&I takes into account the amount of tax the Exchequer would have received if the product had been taxable.
Media team
NS&I has a number of spokespeople available for interviews and our experienced radio team is available via our ISDN line: 020 7602 4522.
The numbers below are for media use only.
Customers
wishing to contact NS&I can find details here.
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