National Savings and Investments rate changes

National Savings and Investments (NS&I) is increasing the interest rates on a wide range of its variable savings offers by up to 0.25% per annum.

This increase follows the movement in the Bank of England base rate on 05 July 2007 which has a bearing on NS& I's variable rate products. The revised interest rates will come into effect on 25 July 2007 for all variable rate products, with the exception of the Direct ISA which was raised on 05 July 2007, Premium Bonds which will take effect from 1 August 2007 and Income Bonds on 6 August 2007.

Premium Bonds

The Premium Bond prize fund rate will increase from 3.80% p.a. to 4.00% p.a. free of UK Income Tax and Capital Gains Tax. The rate increases by 0.20% because of the need to take into account tax foregone. The odds of winning a prize with each £1 Premium Bond will improve from 1 in 24,000 to 1 in 21,000 as a result of the change in the prize band split.