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The best savings deals as NS&I slashes rates and Premium Bonds prizes

The best savings deals as NS&I slashes rates and Premium Bonds prizesMillions of account holders face deep cuts from next month, but there are alternatives

The savings bank NS&I has this week been accused of shutting the door on UK savers after it slashed interest rates on a raft of accounts. Suddenly customers who have been enjoying market-leading returns face rates as low as 0.01%.

The scale of the NS&I (National Savings & Investments) interest-rate cuts stunned many commentators: for example, the return on its income bonds will plummet from 1.15% to 0.01%. As a result, someone with £1,000 saved in the account will receive 10p gross interest after a year. So, after more than 20 years, you might amass enough interest to buy a cup of coffee.

NS&I has also cut the chances of winning money on the premium bonds, which will affect about 24 million people.

So what are the best options for NS&! customers, and others looking for a half-decent savings rate?

Thankfully, it’s not all doom and gloom. Several savings accounts have been launched over the past few days, including one from NatWest that pays a market-leading 3% interest.

We have rounded up the products undergoing a rate cut and suggested some alternatives. All interest rates were correct at the time of writing, but things are moving quickly, so the Moneyfacts.co.uk website is a good place to go for the latest information.

Direct Saver

NS&I’s Direct Saver offers easy access to your money. Photograph: Alamy Stock Photo More

This is an easy access account offered by NS&I that currently pays 1%. From 24 November it will drop to 0.15%.

NS&I is also slashing the rate of its investment account, which lets you take out money with no notice or penalty but has to be operated by post. The rate will tumble from 0.8% to 0.01%.

The alternatives On Thursday, Coventry building society launched Double Access Saver (Online) (2), which pays a variable 1.1% interest. This is the replacement for a…

Rupert Jones

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