NS&I reduces interest rates on fixed rate savings

NS&I (National Savings and Investments) will be decreasing the interest rates on a range of its fixed rate savings offers by up to 0.60% per annum. All new rates come into effect on 24 October 2007.

This change follows significant decreases in the returns on gilt yields since NS& I last increased interest rates on some of its fixed interest offers on 20 June 2007.

The products affected include Fixed Interest Savings Certificates, Fixed Rate Savings Bonds, Children's Bonus Bonds, Capital Bonds and Pensioners Guaranteed Income Bonds.

How NS&I prices products

NS& I prices its fixed rate products according to a number of factors, the principal factor being the return on gilts. Because the return on gilts has fallen since our last rate change, NS& I will now offer lower rates on most of its fixed rate products.

There will be no change to NS& I's variable rate products which are influenced by the Bank of England base rate, and last increased as a result of the base rate change on 5 July 2007.