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Press release
NATIONAL SAVINGS AND INVESTMENTS INCREASES FIXED INTEREST RATES
20 August 2003
Following an increase in gilt yields, National Savings and Investments (NS&I) is increasing the interest rates it pays on its fixed rate products, in line with its aim to offer a consistent and fair return to savers and investors. The new rates come into effect on 21 August.
Included are increases to the rates offered on NS&I's Fixed Interest Savings Certificates (FISC) and Index-linked Savings Certificates (ILSC) - the unique investments which provide tax-free returns. Index-linked Savings Certificates also provide a tax-free return that outstrips inflation. As an example, if the RPI increased by 2.50% a year for five years, then the new 5-year ILSC rate of index-linking plus 0.90% would give an overall return of 3.40% p.a. - equivalent to 5.66% p.a. gross for a higher rate taxpayer and 4.25% p.a. gross for a basic rate taxpayer, at current rates.
Highlights
- Up to 0.25% increases on Index-linked Savings Certificates
- Up to 0.30% increases on Fixed Interest Savings Certificates
- Up to 0.35% increases on Pensioners Guaranteed Income Bonds
- Up to 0.40% increases on Fixed Rate Savings Bonds
See Notes to Editors for full details
These new rates reflect an increase in gilt yields since these rates were last set in June 2003.
Gill Cattanach, commercial director at NS&I, said: "Gilt yields have increased recently, which means we are now in a position to increase the interest rates offered on most of our fixed rate products. We always aim to provide consistent and fair rates."
ENDS
Notes to Editors
| | Rate pa (change in brackets) | AER** |
1-year Pensioners Guaranteed Income Bonds
Series 18 | 3.10% (+0.20%) | 3.14% |
2-year Pensioners Guaranteed Income Bonds
Series 24 | 3.40% (+0.35%) | 3.45% |
5-year Pensioners Guaranteed Income Bonds
Series 33 | 3.80% (+0.35) | 3.87% |
1-year Fixed Rate Savings Bond
Issue 21 |
£50,000+
£20,000+
£500+ |
| |
monthly interest option | £50,000+
£20,000+
£500+ |
|
3.20% (+0.25%)
3.00% (+0.25%)
2.85% (+0.25%)
3.15% (+0.25%)
2.95% (+0.25%)
2.80% (+0.25%) |
3.20%
3.00%
2.85%
3.20%
2.99%
2.84% |
3-year Fixed Rate Savings Bond
Issue 14 | £50,000+
£20,000+
£500+ |
| |
monthly interest option |
£50,000+
£20,000+
£500+ |
|
3.70% (+0.40%)
3.50% (+0.40%)
3.30% (+0.40%)
3.60% (+0.35%)
3.40% (+0.35%)
3.25% (+0.40%) |
3.70%
3.50%
3.30%
3.66%
3.45%
3.30% |
5-year Fixed Rate Savings Bond
Issue 12 |
£50,000+
£20,000+
£500+ |
| |
monthly interest option
| £50,000+
£20,000+
£500+ |
|
3.90% (+0.35%)
3.70% (+0.35%)
3.55% (+0.35%)
3.80% (+0.35%)
3.60% (+0.30%)
3.45% (+0.30%) |
3.90%
3.70%
3.55%
3.87%
3.66%
3.51% |
Capital Bonds - Guaranteed compound rate over 5 years
Issue 12 |
3.85% (+0.35%) |
3.85% |
| Tax-free Rates |
Rate pa/ AER** (change in brackets) |
|
Children's Bonus Bonds - Guaranteed compound
rate over 5 years
Issue 7 |
3.20% (0.15%) |
|
| |
|
Equivalent grossed up rate for basic rate taxpayers**** |
Equivalent grossed up rate for higher rate taxpayers**** |
2-year Fixed Interest Savings Certificates
20th Issue
Guaranteed compound rate over 2 years |
2.55% (+0.30) |
3.19% |
4.25% |
5-year Fixed Interest Savings Certificates
70th Issue
Guaranteed compound rate over 5 years |
2.85% (+0.30%) |
3.56% |
4.75% |
3-year Index-linked Savings Certificates
2nd Issue
Guaranteed compound rate over 3 years |
Index-linking + 0.70% (+0.25%) |
Index-linking + 0.88% |
Index-linking + 1.17% |
5-year Index-linked Savings Certificates
29th Issue
Guaranteed compound rate over 5 years |
Index-linking + 0.90% (0.20%) |
Index-linking + 1.13% |
Index-linking + 1.50% |
* 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.
*** Tax-free means the return is exempt from UK Income Tax at all rates of taxation.
**** At current tax rates
| Mark Brooks | 020 7348 9301 | mark.brooks@nsandi.com |
| Jonathan Akerman | 020 7348 9433 | jonathan.akerman@nsandi.com |
| Samantha Bennett: | 020 7348 9654 | sam.bennett@nsandi.com |
| Wendy Franklin | 020 7348 9449 | wendy.franklin@nsandi.com |
| Fax | 020 7348 9755 | |
| Out of hours | 07778 966387 | |
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