Setback for savers as NS&I cuts 3-year deals

SAVERS face a blow after NS&I announced it has cut the rate on some three-year deals for new customers.

People taking out the threeyear guaranteed growth bonds will now get a rate of 1.95 per cent guaranteed for three years. The previous rate on offer was 2.2 per cent.

Three-year guaranteed income bonds will now pay 1.9 per cent, compared with 2.15 per cent previously.

The changes affect new savers rather than those who already hold the bonds.

NS&I brought guaranteed growth bonds and guaranteed income bonds back on sale in December 2017.

The Treasury-backed organisation, which offers a range of savings and investments to 25 million customers, said there had been a high demand for the bonds.

Jill Waters, retail director at NS&I, said: “NS&I was delighted to bring these highly popular bonds back on to the market at the start of December and demand for the bonds in the first three months has been high.

“It is always a difficult decision to reduce rates.”

She said the changes will allow NS&I, which has a duty to balance the interests of its customers as well as taxpayers and the wider financial services sector, to manage demand.

She continued: “The new rates present a fair offer, and customers continue to benefit from a high holding limit and 100 per cent security on all deposits.”

Savers need at least £500 to take out the deals and they can put away up to £1 million.

Customers who have maturing three-year guaranteed growth bonds and three-year 65-plus guaranteed growth bonds will be able to roll over their investment for another three-year term at a rate of 2.2 per cent – as stated in their maturity pack – NS&I said.

Another product, investment guaranteed growth bonds, will remain on sale until Saturday with a 2.2 per cent rate fixed for three years.

These bonds, available online only, are open to people aged 16 and over and have a minimum investment of £100 and a maximum investment of £3,000.