NS&I slashes three-year rate to 1.95pc

NATIONAL Savings & Investments has cut the rate on its three-year Guaranteed Growth Bond.

As of yesterday, new savers will earn 1.95 pc fixed for three years, down from 2.2 pc.

But NS& I customers with a three-year 65+ Growth Bond, or those with a three-year Guaranteed Growth Bond maturing now, will be able to roll over for another three-year term at 2.2 pc.

Its three-year Guaranteed Income Bond has also been cut from 2.15 pc to 1.9 pc for new savers.

NS&I offered Guaranteed Growth and Income Bonds on December 4 for the first time since 2009.

But it has been forced to cut the interest rate because they are attracting too much money.

The amount that NS&I needs to bring in from savers this financial year — which finishes on April 5 — was reduced in November’s budget from £13 billion to £8 billion.

The one-year Guaranteed Growth Bond is still on sale at 1.5 pc, with a monthly income version at 1.45 pc.

The NS&I Investment Guaranteed Growth Bond is also still available until April 10. It pays 2.2 pc fixed for three years, but the maximum investment is just £3,000.

The bonds are only available online but, once opened, you can run them by post, online or phone.