NS&I reduces interest rate on direct isa

  • Change will ensure NS&I continues to balance interests of its savers, taxpayers and the stability of the broader financial services sector

NS&I today announced that it was reducing the interest rate on its Direct ISA by 0.25% to 1.50% tax-free/AER. This change will come into effect from 27 February 2014. NS&I will be notifying customers affected by the interest rate reduction at least sixty days in advance of it taking place.

NS&I sets its interest rates to balance the interests of its savers, taxpayers and the stability of  the broader financial services sector. It has taken the decision to reduce the interest rate on Direct ISA following its regular review of the savings market, which includes the interest rates payable on products comparable to Direct ISA. NS&I customers can sign-up for email notification of all NS&I interest rate changes and other NS&I news here.

Jane Platt, NS&I Chief Executive, said: “The Direct ISA rate stood out in our review of competitor rates offered on ISAs with no bonus component. We consider the revised rate offers a fair rate to customers in the current interest rate environment.”

New variable rate Rate p.a. (change in brackets)                AER1
Direct ISA 1.50% (-0.25%) tax-free 1.50%
  1. AER stands for Annual Equivalent Rate and enables the comparison of interest rates from different financial institutions and across different products on a like-for-like basis. It shows what the notional annual rate would be if interest was compounded each time it was credited or paid out. Where interest is credited once a year the rate quoted and the AER will be the same.

 
Ends

Notes to Editors

  1. Tax-free means that interest is exempt from UK Income Tax and Capital Gains Tax.
  2. AER stands for Annual Equivalent Rate and enables the comparison of interest rates from different financial institutions and across different products on a like-for-like basis. It shows what the notional annual rate would be if interest was compounded each time it was credited or paid out. Where interest is credited once a year the rate quoted and the AER will be the same.
  3. Information on Direct ISA can be found here.
  4. For further information, or to request an interview, please contact the NS&I media team.

NS&I media team

Gareth Headon

020 7932 6611           
gareth.headon@nsandi.com

Jonty Alone

020 7932 6633           
jonty.alone@nsandi.com

Asia Manzoor

020 7932 6831

asia.manzoor@nsandi.com

Chris Dowsett

020 7932 6644

chris.dowsett@nsandi.com

Lydia Goldman

020 7932 6727

lydia.goldman@nsandi.com

Out of hours                            All numbers above diverted to staff mobile phones

ISDN line for interviews           020 7828 5288

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