NS&I makes changes to its ISA range

NS&I has announced changes to its ISA savings products. From Monday 6 April 2009 NS&I's Cash ISA will no longer be available for new customers. In addition, the facility to deposit into an NS&I Cash ISA at Post Office branches or by bank giro credit is also being withdrawn. Existing Cash ISA customers can continue to save with the account and can manage their Cash ISA by dealing directly with NS&I - by phone, post, through electronic transfer or by standing order.

To support the changes to its Cash ISA, NS&I has also made changes to its Direct ISA to make it more accessible to a wider range of customers. From 1 February 2009 the minimum transaction amounts for the Direct ISA, including the minimum opening deposit, are being reduced. The minimum initial investment has been lowered to £100 from £1,000 and the minimum withdrawal is now £50, reduced from £250.

The changes to NS&I's ISA range are part of its five-year strategy of simplification and modernisation, designed to reduce product duplication and to simplify NS&I's offering to customers.

NS&I launched its Cash ISA at the same time as the rest of the financial sector in April 1999. Three years ago it launched its Direct ISA which is available by telephone or internet only. The Direct ISA has proven much more popular with customers and consequently it has rapidly outgrown the Cash ISA - attracting 65% more customers.

Peter Cornish, Director of Customer Offer, NS&I, said, "We've been looking at ways to simplify our product range for some time. We currently offer two very similar ISA products - our Cash ISA and our Direct ISA. Although the Cash ISA will be closed to new sales, existing Cash ISA customers will still be able to make deposits by telephone, post, standing order or electronic funds transfer. In addition there will be no changes to the way they are able to withdraw money from their accounts. We are writing to all of our Cash ISA customers this month, in advance of the changes being implemented, to explain the changes to them."

New Cash ISA brochures are available in the Post Office this week which explain the changes to the product and the options available to customers.

Peter Cornish continued, "Our Direct ISA is now much more popular with our customers than our Cash ISA. We still have a wide range of savings products available through the Post Office and existing customers who still want to invest with NS&I over the counter will continue to have a choice in a wide range of investments. These include other tax-free NS&I savings products which are unaffected by these changes."