A number of changes to interest rates offered by the government-backed savings bank NS&I were set to come into effect last month, on May 1. However, as Britons were hit by the coronavirus (COVID-19) crisis, some of the planned cuts to interest rates were cancelled.
Meanwhile, the Premium Bonds prize fund rate has remained at 1.40 percent.
This is rather than the planned reduction of 10 basis points to 1.30 percent.
The change would have seen the odds of winning in the Premium Bonds change to 26,000 to one.
Instead, the odds of any £1 Bond number winning any prize continues to be 24,500 to one.
Despite these cancelled cuts, some reductions did go ahead on NS&I fixed term savings products on May 1.
That said, customers holding Guaranteed Growth Bonds, Guaranteed Income Bonds and Fixed Interest Savings Certificates and whose investments mature on or before June 1 2020 and who automatically renew into a new Issue of the same term, will receive the previous, higher interest rate, NS&I said at the time back in April.
But, any customers who choose to renew into a new Issue but a term of a different length, would receive the reduced interest rate effective from May 1 2020.
So, what are the products which have changed?
Guaranteed Growth Bonds (one-year)
WAS: 1.25 percent gross/AER
NOW: 1.10 percent gross/AER (-15 basis points)
Guaranteed Growth Bonds (two-year)
WAS: 1.45 percent gross/AER
NOW: 1.20 percent gross/AER (-25 basis points)
Guaranteed Growth Bonds (three-year)
WAS: 1.70 percent gross/AER
NOW: 1.30 percent gross/AER (-40 basis points)
Guaranteed Growth Bonds (five-year)
WAS: 2.00 percent gross/AER
NOW: 1.65 percent gross/AER (-35 basis points)
Guaranteed Income Bonds (one-year)
WAS: 1.20 percent gross / 1.21 percent AER
NOW: 1.05 percent gross / 1.06 percent AER (-15 basis points)
Guaranteed Income Bonds (two-year)
WAS: 1.40 percent gross / 1.41 percent AER
NOW: 1.15 percent gross / 1.16 percent AER (-25 basis points)
Guaranteed Income Bonds (three-year)
WAS: 1.65 percent gross / 1.66 percent AER
NOW: 1.25 percent gross / 1.26 percent AER (-40 basis points)
Guaranteed Income Bonds (five-year)
WAS: 1.95 percent gross / 1.97 percent AER
NOW: 1.60 percent gross / 1.61 percent AER (-35 basis points)
Fixed Interest Savings Certificates (two-year)
WAS: 1.30 percent tax-free/AER
NOW: 1.15 percent tax-free/AER (-15 basis points)
Fixed Interest Savings Certificates (five-year)
WAS: 1.90 percent tax-free/AER
NOW: 1.60 percent tax-free/AER (-30 basis points)
Published at Mon, 01 Jun 2020 14:23:00 +0000