NS&I have announced interest rate reductions, effective from 24 November 2020, that will apply to NS&I’s variable rate products and some fixed term products. The Premium Bonds prize fund rate will also be reduced and apply from the December 2020 draw.
In July this year, NS&I’s Net Financing target for 2020-21 was revised from £6 billion (+/- £3 billion) to £35 billion (+/- £5 billion) to reflect the Government’s funding requirements due to the Covid-19 pandemic.
The interest rate reductions announced today will see NS&I align its savings products against the rates offered by the banks and building societies.
Ian Ackerley, NS&I Chief Executive, said:
“Reducing interest rates is always a difficult decision. In April we cancelled interest rate reductions announced in February and scheduled for 1 May. Given successive reductions in the Bank of England base rate in March, and subsequent reductions in interest rates by other providers, several of our products have become ‘best buy’ and we have experienced extremely high demand as a consequence.
It is important that we strike a balance between the interests of savers, taxpayers and the broader financial services sector; and it is time for NS&I to return to a more normal competitive position for our products.”
Variable rate savings products
Premium Bonds (effective from December 2020) The Premium Bonds prize fund rate will be reducing by 40 basis points, from 1.40% to 1.00%. The odds of any £1 Bond number winning any prize will decrease from 24,500/1 to 34,500/1. The changes will be effective from the December 2020 prize draw
Value of Premium Bonds prizes
Fixed term savings products
On 24 November, NS&I is also reducing the rates on offer for its fixed term investments, by between 90 and 115 basis points. Fixed term investments are not on general sale and are only available to customers who wish to renew an existing investment when it matures.
For full detail please visit website : https://www.nsandi-adviser.com/nsi-reduce-interest-rates-24-november-2020