Blow for savers as NS&I withdraws popular bonds and cuts rates

by Sylvia Morris from Money Observer |

Those already holding the bonds can still renew them when they reach their maturity date – but at a lower rate.

National Saving and Investment (NS&I) has withdrawn its popular Guaranteed Growth and Guaranteed Income Bonds from general sale.  

Those already holding the bonds can still renew them when they reach their maturity date – but at a lower rate.

The rate on its one-year Guaranteed Growth Bond falls from 1.5% to 1.25%.  The three-year bond goes down from 1.95% to 1.7%.  

The one-year Guaranteed Income Bond drops to 1.2% from 1.45%. While, the three-year bond now pays 1.65% instead of 1.9%.  

At the same time, it has reduced the rates on its two- and five-year Guaranteed Growth Bonds, already closed to new savers but available to those who want to renew, to 1.45% and 2% respectively.  

Fixed Interest Savings Certificate rates are also down - by 0.25 percentage points to 1.3% for two years and 1.9% for five years.

Those with a Guaranteed Growth or Income Bond or Fixed Interest Savings Certificate which come to the end of their term on or before 5 October will receive the old higher rates when they come to renew it – but only if they pick the same term.    

However, if they choose a different term on bonds maturing before 6 October, they will lock in at the lower rates.   

Any savers with bonds which mature on or after 6 October will see automatically be offered the lower rate at renewal.

This article was originally published in our sister magazine Money Observer. Click here to subscribe.

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