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Media centre /
Press releaseNS&I INTEREST RATE CHANGES20 June 2007National Savings and Investments (NS&I) is increasing the interest rates on a range of its fixed rate savings offers by up to 0.35% per annum. All new rates come into effect on 20 June. This rise follows increases in the returns on gilt yields since NS&I last changed interest rates on some of its fixed interest offers on 23 May. Products to benefit from increased interest rates are Fixed Interest Savings Certificates, Fixed Rate Savings Bonds, Capital Bonds and Pensioners Guaranteed Income Bonds. The changes also mean a new issue of Children’s Bonus Bonds will go on sale. How NS&I prices products NS&I prices its fixed rate products according to a number of factors, the principal one of which is the return on gilts. Because the return on gilts has been increasing, NS&I is able to offer higher rates on most of its fixed rate products. NS&I’s variable rate products are influenced by Bank of England base rate changes and were adjusted on 23 May. John Prout, NS&I sales director, said: “With rising returns on gilts, we’re in a position to increase our fixed rates, which is good news for customers who have savings in these particular products.” ENDS Notes to editors
1. Tax-free means that interest and prizes are exempt of 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 5. When interest rates are set on tax-free products, NS&I takes into account the amount of tax the Exchequer would have received if the product had been taxable 6. Inflation-beating Savings interest rates, which were increased on 25 April 2007, remain unchanged.
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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