Media centre /
Press release
NS&I INTEREST RATE REDUCTIONS
17 September 2008
NS&I (National Savings and Investments) will be decreasing the interest rates on some of its fixed rate investments by up to 0.75% per annum on 17 September 2008.
This change follows significant decreases in the returns on nominal gilt yields since NS&I last increased interest rates on its fixed rate investments on 18 June 2008.
The rate changes will affect new investments only (and not current investments) in: Fixed Interest Savings Certificates, Children’s Bonus Bonds, Guaranteed Income Bonds and Guaranteed Growth Bonds.
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 nominal or real gilts.
There will be no change to Inflation-Beating Savings which take into account the return on real yields on government stock (also known as index-linked gilts).
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 decreased as a result of the base rate change on 10 April 2008.
ENDS
Notes to editors
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New tax-free1 fixed rates (New rates effective from (17 September 2008) |
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Rate p.a./ AER2
(change in brackets) |
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Equivalent grossed up rate for basic rate taxpayers3 |
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Equivalent grossed up rate for higher rate taxpayers3 |
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2-year Fixed Interest Savings Certificates
44th Issue
Guaranteed compound rate over 2 years |
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2.95% (-0.55%)
|
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3.69.% |
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4.92% |
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|
|
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|
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5-year Fixed Interest Savings Certificates
93rd Issue
Guaranteed compound rate over 5 years |
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2.95% (-0.55%) |
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3.69% |
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4.92% |
| |
|
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Children’s Bonus Bonds
31st Issue
Guaranteed compound rate over 5 years, including fifth anniversary bonus |
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3.70% (-0.75%) |
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4.63% |
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6.17% |
|
New fixed rates (gross rates4)
(New rates effective from 17 September 2008) |
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New rate p.a. (change in brackets) |
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AER2 |
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1-year Guaranteed Income Bonds
Issue 45
£50,000+
£20,000+
£500+ |
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4.10% (-0.55%)
4.10% (-0.55%)
4.10% (-0.55%)
|
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4.18%
4.18%4.18% |
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|
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|
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3-year Guaranteed Income Bonds
Issue 39
£50,000+
£20,000+
£500+ |
|
3.90% (-0.75%)
3.90% (-0.75%)
3.90% (-0.75%) |
|
3.97%
3.97%3.97% |
| |
|
|
|
|
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5-year Guaranteed Income Bonds
Issue 36
£50,000+
£20,000+
£500+ |
|
3.90% (-0.75%)
3.90% (-0.75%)
3.90% (-0.75%) |
|
3.97%3.97%3.97% |
| |
|
|
|
|
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1-year Guaranteed Growth Bonds
Issue 45
£50,000+
£20,000+
£500+ |
|
4.20% (-0.55%)
4.20% (-0.55%)
4.20% (-0.55%) |
|
AER same as gross |
| |
|
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|
|
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3-year Guaranteed Growth Bonds
Issue 39
£50,000+
£20,000+
£500+ |
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4.00% (-0.75%)
4.00% (-0.75%)
4.00% (-0.75%) |
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AER same as gross |
| |
|
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5-year Guaranteed Growth Bonds
Issue 36
£50,000+
£20,000+
£500+ |
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4.00% (-0.75%)
4.00% (-0.75%)
4.00% (-0.75%) |
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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
4. Gross means the taxable rate of interest without the deduction of UK Income 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.
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