Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
Home Finance NS&I hikes rates but is it enough to tempt savers?

NS&I hikes rates but is it enough to tempt savers?

by Jessica Weisman-Pitts
iStock 13188458891
  • NS&I announced it will raise interest rates on both its Direct Saver and Income Bonds to 0.5% from today.
  • Interest rates for both products had previously been 0.35%.
  • While a welcome boost these rates still fall short of the top rates being offered on the market.
  • It said the increase will also help NS&I meet its Net Financing target for 2021-22 of £6 billion, in a range of £3 billion to £9 billion.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:

“It is hugely positive to see NS&I boosting rates on these products, but they still remain some way off meeting the best rates available on the market. The best easy access savings rate available is currently 0.71% so savvy savers willing to shop around can still find better places to stash their cash.

They may prove tempting for those with very large amounts of savings who welcome the extra protection offered by Treasury. You can hold up to £1 million in Income Bonds and £2 million in the Direct Saver, and it’s all protected by the Treasury. It’s worth saying though that the first £85,000 held with any institution is protected by the Financial Services Compensation Scheme so this will cover most people.

However, it is welcome to see savings rates, long in the doldrums, starting to respond to recent Bank of England interest rate rises. This is the second interest rate boost for these products in recent months as they were increased from 0.15% to 0.35% in December. While still far from market leading, they are a vast improvement on rates that went as low as 0.01% for some of its products and sent customers rushing to the exit.

These mega-low rates meant NS&I undershot its fundraising target in 2020/21 by quite some way and given that in Q2 it had only raised 0.6bn of its £6bn target for this year it’s clear strong action needed to be taken. Whether today’s boost is enough to tempt savers back and close this yawning gap remains to be seen.”

Recent Post

Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.