NS&I interest rate increases

NS&I (National Savings and Investments) will be increasing the interest rates on its fixed rate investments by up to 0.75% per annum on 18 June 2008.

This change follows increases in the returns on gilt yields since NS&I last changed interest rates on some of its fixed rate investments on 21 May 2008.

The rate changes will affect new investments only (and not current investments) in: Fixed Interest Savings Certificates, Index-linked Savings Certificates, Children's Bonus Bonds, Guaranteed Income Bonds and Guaranteed Growth Bonds.

As a result of the rate change, new issues of the three and five-year terms of Index-linked Savings Certificates are now available.

How NS&I prices its investments

NS&I prices its fixed rate investments according to a number of factors, the principal factor being the return on gilts. Because the return on real and nominal gilts has increased since its last rate change NS&I will now offer higher rates on its fixed rate investments.

There will be no change to NS&I's variable rate accounts and investments which are priced in relation to the Bank of England base rate, and last changed as a result of a change to the Bank of England base rate on 10 April 2008.