Media centre /
Press release
NATIONAL SAVINGS AND INVESTMENTS RATE CHANGES
24 January 2007
National Savings and Investments (NS&I) is increasing the interest rates by up to 0.45% on a wide range of its variable and fixed rate savings offers. This increase follows the movement in the Bank of England base rate on 11 January 2007 from 5.00% to 5.25% and some increases in the gilt markets.
The revised interest rates on these fixed and variable rate products, including Income Bonds and Easy Access Savings Account, will come into effect on 24 January 2007, with the exception of the Direct ISA which was raised on 11 January 2007, and Premium Bonds which will take effect from 1 February 2007.
Premium Bonds
The Premium Bond prize fund rate will increase from 3.40% p.a. to 3.60% p.a. free of UK Income Tax and Capital Gains Tax.
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. The prize fund rate split will change with 10% of the prize fund distributed in high value prizes (£5,000 - £1million), 10% in medium value prizes (£500 - £1,000) and 80% in lower value prizes (£50 - £100).
The Effect of Changes in the Premium Bond Prize Fund Rate
|
JANUARY 2007
3.40% prize fund rate |
FEBRUARY 2007 (estimate)
3.60% prize fund rate |
|
Value |
£97.74 million |
£101.76 million |
|
Total number of Prizes |
1.43 million |
1.41 million |
|
Prize band split |
7%-6%-87% |
10%-10%-80% |
The prize fund rate for the special Premium Bonds prize draw for June 2007 when NS&I will pay out five jackpot prizes of £1 million each will be 3.75% per annum tax-free1 (assuming no further changes between now and the end of May 2007).
NS&I’s interest rates: key facts
- When interest rates are set on tax-free1 products, NS&I takes into account the amount of tax 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, NS&I sales director said: “The increase in the Bank of England base rate, coupled with recent rises in the money markets, means that many savings rates are also rising, which is great news for people with money to save or invest.”
ENDS
Notes to editors
| Gross rates2 |
Rate p.a. (change in brackets) |
AER3 |
| Income Bonds (new rates effective from 24 January 2007) |
|
|
| Under £25,000 |
4.70% (+0.25%) |
4.80% |
| £25,000+ |
4.95% (+0.25%) |
5.06% |
| Investment Account (new rates effective from 24 January 2007) |
|
|
| £50,000+ |
4.45% (+0.25%) |
4.45% |
|
£25,000+ |
4.10% (+0.25%) |
4.10% |
|
£10,000+ |
3.90% (+0.25%) |
3.90% |
|
£5,000+ |
3.70% (+0.25%) |
3.70% |
|
£500+ |
3.60% (+0.25%) |
3.60% |
|
Under £500 |
3.55% (+0.25%) |
3.55% |
| Easy Access Savings Account (new rates effective from 24 January 2007) |
|
|
|
£50,000+ |
4.65% (+0.25%) |
4.65% |
|
£25,000+ |
4.40% (+0.25%) |
4.40% |
|
£10,000+ |
4.15% (+0.25%) |
4.15% |
|
£5,000+ |
3.90% (+0.25%) |
3.90% |
|
£1000+ |
3.60% (+0.25%) |
3.60% |
|
Under £1000 |
2.10% (+0.25%) |
2.10% |
| Treasurers Account (new rates effective from 24 January 2007) |
|
|
|
£100,000+ |
4.65% (+0.25%) |
4.65% |
|
£25,000+ |
4.30% (+0.25%) |
4.30% |
|
£10,000+ |
4.10% (+0.25%) |
4.10% |
| New tax-free1 fixed rates |
|
|
|
| New issues from 24 January 2007 |
Rate p.a./ AER3(change in brackets) |
Equivalent grossed up rate for basic rate taxpayers4 |
Equivalent grossed up rate for higher rate taxpayers4 |
| |
| 2-year Fixed Interest Savings Certificates 35th Issue |
3.65% (+0.30%) |
4.56% |
6.08% |
| Guaranteed compound rate over 2 years |
| 5-year Fixed Interest Savings Certificates |
3.50% (+0.30%) |
4.38% |
5.83% |
| 84th Issue |
| Guaranteed compound rate over 5 years |
| Children’s Bonus Bonds |
4.60% (+0.35%) |
5.75% |
7.67% |
| 22nd issue |
| Guaranteed compound rate over 5 years, including fifth anniversary bonus |
| Tax-free variable rates |
Rate p.a. (change in brackets) |
AER3 |
| Cash mini ISA (new rate effective from 24 January 2007) |
4.85% (+0.15%) |
4.85% |
| Direct ISA (new rate effective from 11 January 2007) |
5.80% (+0.25%) |
5.80% |
| Premium Bonds (new rate effective from 1 February 2007) |
3.60% (+0.20%) |
3.60% |
| Fixed rates (gross rates2) |
New rate p.a. (change in brackets) |
AER3 |
| |
| 1-year Pensioners Guaranteed Income Bonds |
5.10% (+0.45%) |
5.22% |
| Series 33 |
| 2-year Pensioners Guaranteed Income Bonds |
5.05% (+0.45%) |
5.17% |
| Series 39 |
| 5-year Pensioners Guaranteed Income Bonds |
4.80% (+0.40%) |
4.91% |
| Series 47 |
| 1-year Fixed Rate Savings Bonds |
|
|
| Issue 35 |
|
|
| £50,000+ |
5.25% (+0.40%) |
|
|
£20,000+ |
5.05% (+0.40%) |
|
| £500+ |
4.90% (+0.40%) |
|
| monthly interest option |
|
|
| £50,000+ |
5.15% (+0.40%) |
5.27% |
|
£20,000+ |
4.95% (+0.40%) |
5.06% |
|
£500+ |
4.80% (+0.40%) |
4.91% |
| 3-year Fixed Rate Savings Bonds |
|
|
| Issue 29 |
|
|
| £50,000+ |
5.15% (+0.45%) |
|
| £20,000+ |
4.95% (+0.45%) |
|
| £500+ |
4.80% (+0.45%) |
|
| monthly interest option |
|
|
| £50,000+ |
5.05% (+0.45%) |
5.17% |
| £20,000+ |
4.85% (+0.45%) |
4.96% |
| £500+ |
4.70% (+0.45%) |
4.80% |
| 5-year Fixed Rate Savings Bonds |
|
|
| Issue 26 |
|
|
| Interest is paid net £50,000+ |
4.95% (+0.40%) |
|
| £20,000+ |
4.75% (+0.40%) |
|
| £500+ |
4.60% (+0.40%) |
|
| monthly interest option |
|
|
| Interest is paid net £50,000+ |
4.85% (+0.40%) |
4.96% |
| £20,000+ |
4.65% (+0.40%) |
4.75% |
| £500+ |
4.50% (+0.40%) |
4.59% |
| Capital Bonds |
|
|
| Series 26 |
4.85% (+0.40%) |
|
| Guaranteed compound rate over 5 years |
|
|
|
|
|
1. Tax-free means that interest and prizes are exempt of UK income Tax and Capital Gains tax
2. Gross means the taxable rate of interest without the deduction of UK Income Tax
3. 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
4. At current tax rates
5. 50 years of Premium Bonds – in June 2007, NS&I will celebrate 50 years since the first Premium Bonds prize draw. For more information, contact the NS&I media team.
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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