NS&I announces interest rate rise – one year after rates were slashed


    Previously standing at 0.01 percent gross/AER, Income Bonds will rise by 14 basis points. It means from today, Income Bonds will offer 0.15 percent gross/AER.

    NS&I said the change aligns the interest rate for Income Bonds with the interest rate for NS&I’s Direct Saver account.

    The Government-backed savings provider said the decision for the increase is in line with NS&I’s operating framework to balance the interests of savers, taxpayers and the broader financial services sector.

    NS&I reduced interest rates last year, announcing the decision in September 2020 before the cuts took effect from November 24.

    It meant Income Bonds were slashed from a market-leading rate of 1.15 percent gross/1.16 percent AER to the 0.01 percent gross/AER mark.

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    At the time, 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 May 1.

    “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.”

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