NS&I boosts interest rate for 333,000 Direct ISA customers

More than 333,000 NS&I Direct ISA customers are set to benefit from today, with the interest rate NS&I pays on the account increasing from 2.15% tax-free/AER to 2.40% tax-free/AER.

The increase to the interest rate paid on NS&I’s Direct ISA follows upwards changes made to Premium Bonds, Income Bonds and Direct Saver earlier this year. In February this year, NS&I also brought one-year Guaranteed Growth Bonds and Guaranteed Income Bonds back on sale.

The change made to NS&I’s Direct ISA will ensure that the product is priced appropriately when compared to the rest of the ISA market. It will also help ensure that NS&I continues to balance the interests of savers, taxpayers and the broader financial services sector.

Variable rate savings products

Notes to Editors

1. NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments to 25 million customers. All products offer 100% capital security as NS&I is backed by HM Treasury.

2. NS&I’s Direct ISA allows customers to invest from £1 and up to £20,000 in the 2023-24 tax-year. Customers can manage the account either online or by the phone. More information can be seen here.

3. NS&I announced on 14 February 2023 that the Premium Bonds prize fund rate would increase from 3.15% to 3.30%, effective from the March 2023 prize draw. The odds remained at 24,000 to 1. On this date, NS&I also announced changes to its Direct Saver and Income Bonds; these changes were effective immediately. There is more information here.

4. On 1 February 2023, NS&I brought Guaranteed Growth Bonds and Guaranteed Income Bonds back on sale; more information is here. On 7 February 2023, NS&I launched a fourth Issue of its Green Savings Bonds account; more information is here.

5. 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.

6. Tax-free means the interest is exempt from UK Income Tax and Capital Gains Tax.

7. Information on NS&I’s on sale products can be found here.

8. Information on NS&I’s off sale products can be found here.