NS&I is reducing the interest rate on its Direct ISA by 25 basis points from 1.00% tax-free/AER to 0.75% tax-free/AER from 24 September 2018. The decision to reduce the interest rate on Direct ISA was taken in order to deliver positive value for taxpayers.
NS&I sets its interest rates to balance the interests of its savers, taxpayers and the stability of the broader financial services sector.
NS&I will be contacting all current Direct ISA customers at least two months in advance of the change.
Jill Waters, NS&I Retail Director, said:
“We have taken the decision to reduce the interest rate on our Direct ISA to deliver positive value for taxpayers. As part of our operating framework, we must ensure that we continue to strike a balance between the needs of our savers, taxpayers and the stability of the broader financial services sector.
“Our Direct ISA continues to gives savers the opportunity to earn a fair rate and benefit from tax free interest, while deposits into all NS&I products are 100% secure, as NS&I is backed by HM Treasury.”
|Product||Current rate||New rate||Effective from|
|Direct ISA||1.00% tax-free/AER||0.75% tax-free/AER||24 September 2018|
Notes to editors
- NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments to over 25 million customers. All products offer 100% capital security, because NS&I is backed by HM Treasury.
- Tax-free means that interest is exempt from UK Income Tax and Capital Gains Tax.
- 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.
- Information on our Direct ISA can be found here.
- For further information please contact the NS&I media team.