NS&I to cut premium bond rate and other accounts

Sisyphean_Task

I've got an NS&I Guaranteed Income Bond up for renewal that was paying 2.5%. The renewal rate for another 5 years is 1.6%. Since May 2019 they have removed the option of an early withdrawal with 90 day interest rate penalty on an renewals. I spoke to NS&I this week and they told me that at the moment they are allowing early withdrawals of fixed rate terms due to people needing money due to coronavirus but it's not known how long that option might continue.

It seems very unfair to me that NS&I have 'officially' stopped the early withdrawal option at a time when interest rates are so low. The 1.6% isn't too bad at the moment but I cannot commit to a full 5 years.

I think NS&I should officially re-introduce the early withdrawal option. Failing that make it more known that early withdrawal are allowed at the moment due to coronavirus and promise people will have notice if that option is going to be stopped. Then people renewing for fixed terms can at least get some interest now and know they can get the cash out if they need it.

Supposedly the CEO reads all emails for feedback but may not respond. Anyone who agrees with my view could try one:

ian.ackerley@nsandi.com

SpanishBlue

Unfortunately, NS&I no longer want or need our money, so the 1.6% they are offering you is actually a very good rate when you compare it with others.

It's normal for many providers not to allow you access to your money with fixed rate savings, so they are not doing anything different to the competition.

These are not good times for savers.

badger09

SpanishBlue said:

Unfortunately, NS&I no longer want or need our money, so the 1.6% they are offering you is actually a very good rate when you compare it with others.

It's normal for many providers not to allow you access to your money with fixed rate savings, so they are not doing anything different to the competition.

These are not good times for savers.

These are not good times for anyone

zagfles

SpanishBlue said:

These are not good times for savers.

No worse than for most of the last decade. Real interest rates have been negative for ages.

Far better to get 0.1% interest with inflation at 0.5% than to get 2% interest with inflation at 3%.

Sisyphean_Task

SpanishBlue said:

Unfortunately, NS&I no longer want or need our money, so the 1.6% they are offering you is actually a very good rate when you compare it with others.

It's normal for many providers not to allow you access to your money with fixed rate savings, so they are not doing anything different to the competition.

These are not good times for savers.

They are doing something different to how they have operated their Guaranteed Income Bonds before May 2019. The 90 day interest penalty was a reasonable compromise to pay for someone who needed their money early. As they are currently allowing people to withdraw money early anyway, with no penalty, it's like admitting the change last year of forcing people to hold to maturity wasn't a good idea.

ratechaser

Can anyone suggest how long ahead of the 24th November I need to get my kids new JISAs set up (probably going with Tesco) so that the transfer happens at the right time? Was thinking I might need to kick it off about 3 weeks ahead...?

Edit: dammit! Just seen Tesco rate is reducing. May end up going with Coventry then even though it's not online managed.

refluxer

ratechaser said:

Can anyone suggest how long ahead of the 24th November I need to get my kids new JISAs set up (probably going with Tesco) so that the transfer happens at the right time? Was thinking I might need to kick it off about 3 weeks ahead...?

Edit: dammit! Just seen Tesco rate is reducing. May end up going with Coventry then even though it's not online managed.

I've seen a nominal 15 working days mentioned in relation to ISA transfers, which would mean your 3 weeks would be about right. NS&I will be very busy at the moment though I suspect, so it could take longer ? My recent ISA transfer from Nationwide to the Principality took a total of 9 working days from opening the account to the transferred balance being visible, but I've no idea whether the funds were transferred electronically or by cheque.

I also have an NS&I Junior ISA, but I'm going to wait until rates elsewhere have settled before moving as I've not long moved to the NS&I ! I think it's quite likely the Coventry will also drop their rate, but a lack of online management rules them out for me anyway in which case Tesco would be the next-best option.

gt94sss2

The Times is reporting that NS&I may cut rates yet again

The article at https://www.thetimes.co.uk/article/ns-i-may-cut-rates-again-after-savers-pour-in-cash-q0jsfptc8 does include some interesting facts including

* NS&I gained deposits of £38.3 billion in the first six months of the financial year, with £23.8 billion of that between July and September.

* Its official was £35 billion target for this financial year (which it can exceed by £5bn) was only increased in July (previously it was just £6bn)

* If inflows don't stop as a result of the November cuts, it will have to reduce rates more or close issues.

It has

* 25m customers with an average age of 55

* 186,000 income bond accounts, with an average balance of £117,200

* 172,000 direct saver customers, who have an average balance of £106,000

* £88.5bn in Premium Bonds spread over 21.1m customers

polymaff

Dog-whistle journalism.  How The Times has diminshed.

RG2015

polymaff said:

Dog-whistle journalism.  How The Times has diminshed.

Did you not notice this when Murdoch bought it forty odd years ago?