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NS&I cuts rates and withdraws some products - how to get more

What the latest cut to NS&I rates mean for your savings and how you can get more on your cash with a small amount of effort.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Last week National Savings and Investments (NS&I) withdrew its one and three-year Guaranteed Growth and Income bonds from sale with immediate effect. It also cut rates for both new customers and some savers rolling over. It’ll cost savers nearly £60m in lost interest.

If your bond matures by 5 October and you roll into a product with exactly the same term you’ll get the old higher rate. But otherwise you’ll get the new lower rate.

How the rates are changing

Product Old rate New rate
Guaranteed Growth Bonds
1 year 1.5% 1.25%
2 years 1.7% 1.45%
3 years 1.95% 1.7%
5 years 2.25% 2%
Guaranteed Income Bonds
1 year 1.45% 1.2%
2 years 1.65% 1.4%
3 years 1.9% 1.65%
5 years 2.2% 1.95%
Fixed interest savings
2 years 1.55% 1.3%
5 years 2.15% 1.9%

Why they’ve cut rates

NS&I is backed by the UK Government, so they have to find a balance between helping savers while raising enough money for the UK Treasury, which sets limits on what NS&I can raise. Next year’s is roughly £11bn but if the products on offer are too popular, it could end up raising more than this.

The cuts come alongside other changes too. In May this year, NS&I changed the inflation measure used to calculate returns on their index-linked savings certificates from the Retail Price Index to the usually lower Consumer Price Index. And last year it dramatically lowered the amount savers can deposit into some accounts, from £1m to just £10,000.

NS&I products have long been popular with the public because of the government guarantee on their money, and the fact that the interest earnt is tax free.

But if you’re prepared to look somewhere else, you could get much better rates on your savings while still benefitting from some protection on your money through the Financial Services Compensation Scheme (FSCS). Eligible deposits are protected up to £85,000 per banking licence with the FSCS.

More on the FSCS

And the best thing is you don’t have to spend hours scouring the market and going through the hassle of applying to different banks, providing the same information and proving your identity each time. There’s a new way that gives you great rates while cutting out the hassle.

An alternative home for your cash

Active Savings lets you choose savings products from a range of different banks and building societies offering great rates, all through the convenience of one online account. There’s easy access and fixed term savings up to five years to choose from, with rates up to 2.10% *AER/Gross for a two year fix, letting you manage your savings in a way that suits you. On the same savings pot of £30,000, that’s £195 more interest than the best comparable NS&I product listed above.

If you choose fixed term savings, we’ll alert you when it’s about to mature so you can keep your money working hard by choosing another product. Swapping to a new product is easy – it only takes a few clicks.

So why not improve the way you save, for the better? You can try Active Savings from as little as £1.

This article isn't personal advice, but could help you make your own decisions so you can make more of your money. If you are unsure of the suitability of a product for your circumstances, please seek advice. Inflation reduces the future spending power of money. Fixed term products generally only allow access to funds at maturity.

Discover Active Savings

*AER (Annual Equivalent Rate) shows what the interest rate would be if interest was paid and compounded once each year. It helps you compare the interest rates on different savings products..

Gross means the interest rate without any tax deducted. Interest is paid gross. You are responsible for paying any tax due on interest that exceeds your Personal Savings Allowance to HM Revenue & Customs.

Expected profit rise – Islamic banks offer an expected profit rate, rather than interest on their savings products, in order to comply with Sharia banking principles..

This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248. The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017 with firm reference 751996 for the provision of payment services. Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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