Change to NS&I's direct ISA guarantee

NS& I (National Savings and Investments) is to continue to offer a guarantee on its popular Direct ISA. From 6 April 2008 the Direct ISA will pay interest at 0.30% above the Bank of England base rate, offering an attractive rate of 5.55% per annum. NS& I will be writing to all existing customers of its Direct ISA this week to inform them of the change to the guarantee.

Following the change to ISA rules, customers of NS& I's Direct ISA and its Cash ISA (available via post, telephone and through the Post Office) will be able to invest up to £3,600 each tax year. Customers of the Direct ISA can make deposits, carry out balance checks, look at their transaction history and make withdrawals online 24 hours a day and by phone between 7 a.m. and midnight, seven days a week.

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 (with a debit card only)
Interest rate guaranteed to be 0.30% above base rate until 5 April 2009
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)
Withdrawals: made online or by phone
Minimum withdrawal: £250 to nominated bank account
All interest free of UK income tax
Transfers from existing NS& I Cash ISA customers only who opened their account prior to 6th April 2006
It will not be possible to transfer into NS& I's Direct ISA from any other ISA provider

NS& I sales director, John Prout, said: "A cash ISA should be the first port of call for savers wanting to shelter their savings from tax. "

"We know that over the past two years our customers have valued the Direct ISA's guarantee that the return on any investment will beat the Bank of England base rate, and this is why we have extended the guarantee.”