NS&I slashes its savings cap from £1m to £10,000

NATIONAL Savings & Investments has slashed the savings limit on four popular accounts.

People who take out new Guaranteed Growth Bonds and Guaranteed Income Bonds over one or three years will be able to deposit only up to £10,000 — down from £1 million previously.

The 1.5 pc interest rate for the one-year bond and 1.95 pc for the three-year bond stay the same.

It is a new blow to savers struggling with low rates.

The bonds are popular, as your cash is protected in full by the Government, which borrows the money. At banks, only £85,000 is guaranteed under the Financial Services Compensation Scheme if a firm fails.

Each year, the Government sets NS&I a fundraising target. NS&I feared the bonds could be too popular, leading to it attracting too much cash and overshooting this year’s £6 billion target.

It opted to cut the savings limit instead of interest rates.

The £10,000 limit is for new customers, not those who already have the bonds and wish to renew when these mature.