Inundated NS&I drops savings rates

by Gill Montia

Story link: Inundated NS&I drops savings rates

National Savings & Investments (NS&I), the government-backed saving provider that benefits from a 100% guarantee on deposits, has cut some interest rates by up to 0.2%.

The body has been inundated by savers looking for a safe place to keep their money as turmoil sweeps through the global financial sector and governments nationalise banks.

According to a NS&I spokesman, the action has been taken to maintain a consistent level of market share.

The move will affect the UK’s Premium Bond fund, reducing the size of the pot, but will not change the two £1 million jackpot prizes awarded each month.

Meanwhile, government-owned Northern Rock, which also sports a 100% guarantee on deposits, withdrew a number of its savings products at the end of last week, again in response to a rising market share, which in the case of the nationalised bank is capped at 1.5%.