NS&I Direct ISA interest rate lowers to 5.30%

The interest rate paid on NS&I's Direct ISA will decrease from 5.55% per annum to 5.30% following today's decrease in the Bank of England base rate by 0.25%.

The new rate becomes effective from today and is guaranteed to be 0.30% above base rate until 5 April 2009.

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, make withdrawals and update their details 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 it is backed by HM Treasury.

Direct ISA key features

Invest online and by phone only with a debit card
Interest rate guaranteed to be 0.30% above base rate until 5 April 2009
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 ISA by 5 April 2006, but it is not possible to transfer into NS&I's Direct ISA from any other ISA provider.