🚨 Attention, savers! 🚨 NS&I has just announced a cut in interest rates for its British Savings Bonds. This isn’t the news we were hoping for as we step into January.
Here’s the rundown: Starting now, the rates on new issues of these bonds have dipped, moving in line with broader market changes. Although the recent Bank of England base rate tweak from 4% to 3.75% cheered mortgage borrowers, savers are feeling the pinch.
It’s all part of NS&I’s strategy to hit annual net financing targets, while carefully balancing the interests of savers and taxpayers alike. Funds locked in these fixed-term accounts require a minimum of £500, with the ceiling set at £1 million per individual per issue.
Let’s talk numbers:
📉 One-year bonds are now at 4.07% AER, down from 4.20%.
📉 Two-year deals drop to 3.98% AER, previously at 4.10%.
📉 Three-year versions take a hit, lowering to 4.02% from 4.16% AER.
📉 And five-year bonds will offer 4.05% AER instead of the earlier 4.15%.
These changes apply to new bonds and those maturing soon. If you’ve already got your 30-day maturity notice, your rate remains as quoted.
Despite these cuts, NS&I still promises 100% capital security with Treasury backing, making it a secure option amidst the ups and downs. Stay informed, plan ahead, and see how these changes fit into your savings strategy.
Are these shifts affecting your saving plans? Let us know below! 👇💬