NS&I boosts interest rates on savings products

Thursday, 21 July 2022 09:49

NS&I is to increase rates on many of its savings products in a move it says will benefit more than 1.3m people.

The rates on Direct Saver, Income Bonds, Direct ISA and Junior ISA, will go up from today (see table below).

The rate on the Direct Saver account and Income Bonds will rise from 0.5% to 1.2%. The Direct ISA goes up from 0.35% to 0.9% and the Junior ISA rises from 1.5% to 2.2%.

There will also be significant rises on Fixed Term Savings from 1 August of between 55 and 220 basis points although these are not currently available and the new interest rates are only available to customers with maturing investments.

The rise follows recent increases in the Bank Base rate to 1.25% and rises in savings rates at many competitors.

The Premium Bonds prize fund rate was boost recently with the odds of winning reduced from 34,500 to 1 to 24,500 to 1. An additional 1.4 million prizes were paid out in the June prize draw.

NS&I says the changes ensure that NS&I’s products are “priced appropriately” when compared with the rest of the savings market.

NS&I is backed by the Treasury and has 25m customers.

Variable rate savings products

Product	Previous interest rate	Interest rate from today (21 July 2022)
Direct Saver	0.50% gross/AER	1.20% gross/AER (+70 basis points)
Income Bonds	0.50% gross/AER	1.20% gross/1.21% AER (+70 basis points)
Direct ISA	0.35% gross/AER	0.90% gross/AER (+55 basis points)
Junior ISA	1.50% gross/AER	2.20% gross/AER (+70 basis points)

Fixed term savings products (currently not on sale)

Product	Current rate	Interest rate from 1 August 2022 (change in brackets)
Guaranteed Growth Bonds (1-year)	0.10% gross/AER	1.85% gross/AER (+175 basis points)
Guaranteed Growth Bonds (2-year)	0.15% gross/AER	2.25% gross/AER (+210 basis points)
Guaranteed Growth Bonds (3-year)	0.40% gross/AER	2.55% gross/AER (+215 basis points)
Guaranteed Growth Bonds (5-year)	0.55% gross/AER	2.55% gross/AER (+200 basis points)
Guaranteed Income Bonds (1-year)	0.06% gross / 0.06% AER	1.80% gross / 1.81% AER (+174 basis points)
Guaranteed Income Bonds (2-year)	0.11% gross / 0.11% AER	2.20% gross / 2.22% AER (+209 basis points)
Guaranteed Income Bonds (3-year)	0.36% gross / 0.36% AER	2.50% gross / 2.53% AER (+214 basis points)
Guaranteed Income Bonds (5-year)	0.51% gross / 0.51% AER	2.50% gross / 2.53% AER (+199 basis points)
Fixed Interest Savings Certificates (2-year)	1.30% tax-free/AER	2.15% tax-free/AER (+85 basis points)
Fixed Interest Savings Certificates (5-year)	1.90% tax-free/AER	2.45% tax-free/AER (+55 basis points)