Media centre /

Press release

NATIONAL SAVINGS AND INVESTMENTS RATE CHANGES

22 November 2006

National Savings and Investments (NS&I) is increasing the interest rates on its wide range of variable rate savings offers by up to 0.25%. This increase follows the movement in the Bank of England base rate on 9 November 2006 from 4.75% to 5.00%.

Interest rates on NS&I’s variable rate products, including Income Bonds, will come into effect on 22 November 2006, with the exception of the Direct ISA which was raised on 9 November 2006, and Premium Bonds which will take effect from 1 December 2006.

Premium Bonds

The Premium Bond prize fund rate will increase from 3.15% p.a. to 3.40% p.a. tax-free*** for January 2007. The rate for December will rise to 3.55% p.a tax-free; however this is due to the three extra £1 million jackpot prizes.

The odds of winning a prize will stay at 24,000 to 1, meaning that someone with the maximum investment in Premium Bonds of £30,000 could, with average luck, win 15 tax-free prizes a year.

NS&I’s interest rates: key facts

When interest rates are set on tax-free*** products, NS&I takes into account the amount of tax that the Exchequer would have received if the product had been taxable
NS&I’s accessibility is not limited by geography or location, as the same rates are available throughout the UK and to non UK resident customers
NS&I’s fixed rate products are on sale every day throughout the year (although NS&I’s Guaranteed Equity Bond is on sale in tranches 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

John Prout, Sales Director for NS&I, said: "We always price our offers fairly and consistently, and wherever possible we will adjust our variable rate products to follow changes in the Bank of England base rate."

New variable rates

Gross Rates*	Rate p.a. (change in brackets)	AER**
Income Bonds (new rates effective from 22 November 2006)
Under £25,000
£25,000+	4.45% (+0.25%)	4.54%
	4.70% (+0.25%)	4.80%

Investment Account (new rates effective from 22 November 2006)
£50,000+	4.20% (+0.15%)	4.20%
£25,000+	3.85% (+0.15%)	3.85%
£10,000+	3.65% (+0.15%)	3.65%
£5,000+	3.45% (+0.15%)	3.45%
£500+	3.35% (+0.15%)	3.35%
Under £500	3.30% (+0.15%)	3.30%

Easy Access Savings Account
£50,000+	4.40% (+0.10%)	4.40%
£25,000+	4.15% (+0.10%)	4.15%
£10,000+	3.90% (+0.10%)	3.90%
£5,000+	3.65% (+0.10%)	3.65%
£1000+	3.35% (+0.10%)	3.35%
Under £1000	1.85% (+0.10%)	1.85%

Treasurers Account (new rates effective from 22 November 2006)
£100,000+	4.40% (+0.25%)	4.40%
£25,000+	4.05% (+0.25%)	4.05%
£10,000+	3.85% (+0.25%)	3.85%

Tax-free rates***	Rate p.a. (change in brackets)	AER**
Cash mini ISA (New rate effective from 22 November 2006)	4.70% (+0.25%)	4.70%
Direct ISA (new rate effective from 09 November 2006)	5.55% (+0.25%)	5.55%
Premium Bonds (New rate for December 2006)****	3.55% (+0.25%)	3.55%
(New rate effective from 1 January 2007)	3.40% (+0.25%)	3.40%

****For the December 2006 draw only, the prize fund rate for Premium Bonds is 3.55% per annum tax-free, to take into account three extra £1 million jackpot prizes. The June 2007 prize fund rate will also be 3.55% per annum tax-free (assuming no further changes between now and the end of May 2007).

* 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 that interest and prizes are exempt of UK income Tax and Capital Gains tax.

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.

Gareth Headon		020 7348 9494
		gareth.headon@nsandi.com
Gill Stephens		020 7348 9449
		gill.stephens@nsandi.com
Iman Asante		020 7348 9301
		iman.asante@nsandi.com
Monica Del-Villar		020 7348 9654
		monica.del-villar@nsandi.com
ISDN for interviews		020 7602 4522
Out of hours		All numbers above diverted to staffed mobile phones

Home Print Email to a friend

Helpful information

Your savings needs