National Savings & Investments drop rates

ashm1

National Savings & Investments has cut the returns paid on some of its savings products by up to 0.25 percentage points.The Government institution said it was reducing rates on its variable savings products following the recent cut in the Bank of England base rate.The group's income bonds, investment accounts and easy access savings accounts will all have their returns cut by 0.25 per cent.NS&I is also reducing the total value of prizes in its Premium Bond fund from £108.8 million to £102.2 million.The move means the odds of winning a prize will drop from 21,000-1 to 22,000-1, while the annual returns for someone with average luck who has the maximum £30,000 invested in Premium Bonds will fall from 3.6 per cent to 3.4 per cent.

http://www.telegraph.co.uk/news/main.jhtml?view=DETAILS&grid=&xml=/news/2008/04/22/ndarling122.xml

[Deleted User]

"The move means the odds of winning a prize will drop from 21,000-1 to 22,000-1"

What a joke!

earlgrey_3

Suppose they could reduce the maximum size of the prizes to a fiver which would improve the chances of winning considerably but doubt that's what most would want.

The prize is tax free so that 3.4% is worth 5.7% to a higher rate payer. For anyone who wants the 100% certainty of National Savings that's a lot better than the taxable 4% paid on £25K to £50K in an Investment Account.

Not of any interest to me but can well understand why anyone who fancies a flutter but wants a rock solid account might find them attractive - as many do.

They might even take the view that putting money in many of the banks for a slightly better rate like the rest of us is more of a gamble. Good luck to them.