NS&I cuts rates by up to 1.35%

National Savings and Investments (NS&I) has cut interest rates on its variable-rate savings accounts by up to 0.75%.

Its Direct ISA now pays 1.8%, whilst its easy access savings account pays just 0.3% on balances up to £10,000.

The move follows last month’s cuts of up to 1% on NS&I’s variable accounts.

Interest on NS&I’s fixed-rate accounts, meanwhile, has been reduced by up to 1.35%.

Premium Bond prizes will remain at 1.8% until at least March 2009.

A spokesperson for the government-backed bank said: “National Savings & Investments is reducing rates on its fixed-rate savings products by up to 1.35% as a consequence of falls in gilt yields by up to 3.5% since September 2008.

“NS&I’s fixed savings rates take into account the returns on gilts, whilst its variable savings rates are affected by changes to the Bank of England base rate.”

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