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Press release
NATIONAL SAVINGS AND INVESTMENTS INCREASES FIXED AND VARIABLE RATES
20 November 2003
INDEX-LINKED SAVINGS CERTIFICATES AND PREMIUM BONDS RISE
National Savings and Investments (NS&I) is increasing the interest rates it offers on a wide range of its fixed and variable rate products. It is the fourth time in three months that NS&I has increased its fixed rates.
New issues of fixed rate products, offering rates up to 0.45% higher than the previous issues, go on sale on 20 November 2003 and reflect NS&I's commitment to offering consistent, fair and guaranteed returns to savers and investors.
Index-linked Savings Certificates
Among products with increased interest rates are new issues of the unique inflation-beating Index-linked Savings Certificates. A three-year Certificate rises by 0.15% to give a return of RPI + 1.1% p.a. (if RPI stayed at its current rate of 2.6% for the next three years, the return would be 3.7% p.a. tax-free), while a five-year Certificate rises by 0.20% to RPI +1.25% p.a. (if RPI stayed at its current rate of 2.6% for the next five years, the return would be 3.85% p.a. tax-free).
Premium Bonds
Included in NS&I's rate change is an increase of 0.25% on the Premium Bond prize fund rate, which will come into effect on 1 March 2004. The prize fund rises to 2.40% p.a. tax-free.
The odds of winning a prize will remain at 30,000 to 1, meaning that someone with the maximum investment in Premium Bonds of £30,000 could, with average luck, expect to win 12 tax-free prizes a year. At these odds, someone with £15,000 invested could expect to win six prizes a year.
The change in the prize fund rate will also see the introduction of a new prize structure, currently 4% high (£5,000+), 3% medium (£1,000 and £500) and 93% low (£100 and £50) value prizes. The new structure will change to 5%, 5% and 90% respectively. The overall effect of the changes means the overall number of prizes awarded will not be affected but their average value will increase.
NS&I's interest rates: key facts
- NS&I does not price discriminate between different channels - the return on products is the same no matter where, when or how they were bought. NS&I's sales channels include telephone, online, by post or at any of the UK's 17,000 Post Office branches
- NS&I's accessibility is not limited by geography or location
- NS&I's fixed rate products are on sale 365 days a year - many providers offer fixed rate products for limited periods during the year
- NS&I prices its products to give fair, consistent and value for money returns. NS&I does not try to buy market share, saving the need for customers to spend time shopping around for short-term headline rates
Alan Cook, chief executive of NS&I, said: "Increases in market rates mean we can pass them to savers and investors on a wide range of our products, many of which are not only unique but also offer tax-free returns."
ENDS
NOTES TO EDITORS
New Tax-free Rates*
| |
Rate pa/ AER** (change in brackets) |
Equivalent grossed up rate for basic rate taxpayers*** |
Equivalent grossed up rate for higher rate taxpayers** |
2-year Fixed Interest Savings Certificates
23rd Issue
Guaranteed compound rate over 2 years |
3.05% (+0.20) |
3.81% |
5.08% |
5-year Fixed Interest Savings Certificates
73rd Issue
Guaranteed compound rate over 5 years |
3.40% (+0.25%) |
4.25% |
5.67% |
5-year Fixed Interest Savings Certificates
73rd Issue
Guaranteed compound rate over 5 years |
3.40% (+0.25%) |
4.25% |
5.67% |
3-year Index-linked Savings Certificates
4th issue |
Index-linking + 1.10% (+0.15%) |
Index-linking + 1.38% |
Index-linking + 1.83% |
5-year Index-linked Savings Certificates
31st issue |
Index-linking + 1.25% (+0.20%) |
Index-linking + 1.56% |
Index-linking + 2.08% |
Children's Bonus Bonds
11th issue
Guaranteed compound rate over 5 years,
including fifth anniversary bonus |
4.40% (+0.40%) |
n/a |
n/a |
| Premium Bonds (new rate effective from 1 March 2004) |
2.40% (+ 0.25%) |
3% |
4% |
New Fixed Rates
| Gross Rates*** | Rate p.a. (change in brackets) | AER**** |
1-year Pensioners Guaranteed Income Bonds
Series 21 |
3.80% (+0.20%) |
3.87% |
2-year Pensioners Guaranteed Income Bonds
Series 27 | 4.15% (+0.35%) | 4.23% |
5-year Pensioners Guaranteed Income Bonds
Series 36 | 4.60% (+0.40%) | 4.70% |
1-year Fixed Rate Savings Bond
Issue 24 |
£50,000+
£20,000+
£500+ |
| |
monthly interest option | £50,000+
£20,000+
£500+ |
|
3.95% (+0.25%)
3.75% (+0.25%)
3.60% (+0.25%)
3.85% (+0.25%)
3.65% (+0.25%)
3.50% (+0.20%) |
3.95%
3.75%
3.60%
3.92%
3.71%
3.56% |
3-year Fixed Rate Savings Bond
Issue 17 | £50,000+
£20,000+
£500+ |
| |
monthly interest option |
£50,000+
£20,000+
£500+ |
|
4.55% (+0.45%)
4.35% (+0.45%)
4.20% (+0.45%)
4.45% (+0.45%)
4.25% (+0.45%)
4.10% (+0.45%) |
4.55%
4.35%
4.20%
4.54%
4.33%
4.18% |
5-year Fixed Rate Savings Bond
Issue 15 |
£50,000+
£20,000+
£500+ |
| |
monthly interest option
| £50,000+
£20,000+
£500+ |
|
4.75% (+0.40%)
4.55% (+0.40%)
4.40% (+0.40%)
4.65% (+0.45%)
4.45% (+0.40%)
4.30% (+0.40%) |
4.75%
4.55%
4.40%
4.75%
4.54%
4.39% |
Capital Bonds
Issue 15 |
4.65% (+0.35%) |
4.65% |
New Variable Rates
| Gross Rates*** | Rate p.a. (change in brackets) |
AER**** |
Income Bonds (new rates effective from 1 January 2004)
Under £25,000
£25,000+ |
3.20% (+0.25%)
3.45% (+0.25%) |
3.25%
3.51% |
| |
Investment Account (new rates effective from 4 December 2003)
£50,000+
£25,000+
£10,000+
£5,000+
£500+
Under £500 |
3.15% (+0.25%)
2.80% (+0.25%)
2.60% (+0.25%)
2.40% (+0.25%)
2.30% (+0.25%)
2.25% (+0.25%) |
3.15%
2.80%
2.60%
2.40%
2.30%
2.25% |
| |
Treasurers Account (new rates effective from 4 December 2003)
£100,000+
£25,000+
£10,000+ |
3.15% (+0.25%)
2.80% (+0.25%)
2.60% (+0.25%) |
3.15%
2.80%
2.60% |
* Tax-free means the return is exempt from UK Income Tax at all rates of taxation.
** At current tax rates.
*** 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.
2. NS&I is the exclusive sponsor of The Classical BRIT Awards, the UK's premier classical awards show, at the Royal Albert Hall on 26 May 2004.
3. For further information, or to arrange an interview, contact the media relations team.
| 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 | All above numbers go to mobile phones staffed 24 hours |
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
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