NS&I now cream of the crop
Sylvia Morris
As banks and building societies continue to slash interest rates at an alarming rate, the Governmentsupported provider now offers many of the best accounts.
And while most other top deals require you to be online, you can open NS&I accounts by post or phone, too.
However savers should prepare for delays and long call waiting times as a result of the coronavirus chaos. At present, it is taking about two weeks to open a postal account. And NS&I is encouraging customers to use its website, to keep phone lines clear for those without internet access.
The Government-backed bank is back among the best payers after reversing its decision to slash rates from May 1. Its Direct Saver pays 1 pc on £1 or more and has no withdrawal restrictions.
This is just a whisker below online accounts Marcus by Goldman Sachs and RCI Freedom at 1.05 pc.
It is also 100 times more than what you would get with a major bank, which now pay as little as 0.01 pc.
On each £10,000 you save, this amounts to an extra £99 a year.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, says: ‘NS&I is attracting some love in the time of Coronavirus. It already has more than a third of people in the UK as customers and its response to the crisis is winning over more.’
NS&I’s Direct Isa pays 0.9pc and can also be opened over the phone or online but you cannot transfer in other Isa cash.
NS&I’s Income Bonds are popular with pensioners because they give you easy access to your money and pay interest on the 5th of each month. Some 181,000 savers already hold them. You can buy them online, by post or over the phone. There is a minimum deposit of £500. At 1.15 pc they offer the best rate on this type of account.
NS&I’s Investment Account, with about 1.6 million savers, is a postalonly account paying 0.8 pc which you open with a cheque of £20 or more. The only easy-access postal account which pays more is Kent Reliance Easy Access at 1 pc.
NS&I Premium Bonds don’t pay interest. Instead, you are in with a chance to win monthly prizes of between £25 to £1 million. There is a generous prize pot, with 1.4 pc of all money in Premium Bonds paid out each year.
With some 21 million customers holding £81 billion, they are the most popular NS&I account by far. You can buy them online, by post or by phone and sell them at any time and get your money paid back into your current account.
All your money with NS&I is 100 pc backed by the Government.
NS&I Junior Isa pays the top rate at 3.25 pc, available online only. Parents can put in up to £9,000 into the account this tax year for children. The money is locked away until the child reaches 18.
Jill Waters, its retail director, says: ‘NS&I is pleased to be supporting savers during this unprecedented time. We are asking customers to do everything they can online.’