NS&I Direct ISA interest rate rises to 6.30%

The interest rate paid on NS&I's Direct ISA will rise from 6.05% per annum to 6.30% following the increase in the Bank of England base rate by 0.25%.

The new higher rate becomes effective from today and is guaranteed to be at least 0.55% above base rate until 5 April 2008 at the earliest.

NS&I's Direct ISA was launched over a year ago, on 6 April 2006, and is available online and by telephone only. Customers can invest up to £3,000 each tax year and have direct access to their account 24 hours a day.

And the Direct ISA comes with the 100% capital guarantee which NS& I can offer because all of its savings and investments are backed by HM Treasury.

Direct ISA key features

Invest online and by phone only with a debit card

Interest rate guaranteed to be 0.55% above base rate until at least 5 April 2008

Consistent interest rate: no short-term introductory bonus

Convenience of opening and managing account online and by phone

Minimum deposit: £1,000

Minimum further deposit: £250 (or £100 by standing order)

Minimum withdrawal: £250 to nominated bank account

All interest free of UK income tax

Direct ISA is open to new customers and those who had opened an NS& I Cash mini ISA by 5 April 2006, but it is not be possible to transfer into NS& I's Direct ISA from any other ISA provider.

NS&I will announce any other interest rate changes in due course.