Media centre /
Press release
NS&I INTEREST RATE INCREASES
21 May 2008
NS&I (National Savings and Investments) will be increasing the interest rates on its fixed rate investments by up to 0.50% per annum on 21 May 2008.
This change follows increases in the returns on gilt yields since NS&I last changed interest rates on some of its fixed rate investments on 2 April 2008.
The rate changes will affect new investments only (and not current investments) in: Fixed Interest Savings Certificates, Index-linked Savings Certificates, Children’s Bonus Bonds, Guaranteed Income Bonds and Guaranteed Growth Bonds.
As a result of the rate change, new issues of the three and five-year terms of Index-linked Savings Certificates are now available.
How NS&I prices its investments
NS&I prices its fixed rate investments according to a number of factors, the principal factor being the return on gilts. Because the return on nominal gilts has increased since its last rate change NS&I will now offer higher rates on its fixed rate investments.
There will be no change to NS&I’s variable rate accounts and investments which are priced in relation to the Bank of England base rate, and last changed as a result of a change to the Bank of England base rate on 10 April 2008.
ENDS
Notes to editors
|
New tax-free1 fixed rates (New rates effective from 21 May 2008) |
Rate p.a./ AER2
(change in brackets) |
Equivalent grossed up rate for basic rate taxpayers3 |
Equivalent grossed up rate for higher rate taxpayers3 |
| |
|
|
|
|
2-year Fixed Interest Savings Certificates
42nd Issue
Guaranteed compound rate over 2 years |
2.90% (+0.30%)
|
3.63.% |
4.83% |
| |
|
|
|
|
5-year Fixed Interest Savings Certificates
91st Issue
Guaranteed compound rate over 5 years |
2.95% (+0.25%) |
3.69% |
4.92% |
| |
|
|
|
|
Children’s Bonus Bonds
29th issue
Guaranteed compound rate over 5 years, including fifth anniversary bonus |
3.75% (+0.35%) |
4.69% |
6.25% |
| |
|
|
|
|
5-year Index-linked Savings Certificates
44th issue
Guaranteed compound rate over 5 years |
Index-linking + 0.70% (+ 0.35%)
|
Index-linking + 0.88% |
Index-linking + 1.17% |
| |
|
|
|
|
3-year Index-linked Savings Certificates
17th issue
Guaranteed compound rate over 3 years |
Index-linking + 0.70% (+ 0.45%)
|
Index-linking + 0.88% |
Index-linking + 1.17% |
|
New fixed rates (gross rates4)
(New rates effective from 21 May 2008) |
New rate p.a. (change in brackets) |
AER2 |
| |
|
|
|
1-year Guaranteed Income Bonds
Issue 43 |
3.90% (+ 0.50%) |
3.97% |
| |
|
|
|
3-year Guaranteed Income Bonds
Issue 37 |
3.90% (+0.45%) |
3.97% |
| |
|
|
|
5-year Guaranteed Income Bond
Issue 34 |
3.95% (+0.40%) |
4.02% |
| |
|
|
|
1-year Guaranteed Growth Bonds
Issue 43 |
4.00% (+0.50%) |
AER same as gross |
| |
|
|
|
3-year Guaranteed Growth Bonds
Issue 37 |
4.00% (+0.45% |
AER same as gross |
| |
|
|
|
5-year Guaranteed Growth Bonds
Issue 34 |
4.05% (+0.40% |
AER same as gross |
1. Tax-free means that interest is exempt from UK Income Tax and Capital Gains Tax
2. 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
3. At current tax rates
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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