Where to put your savings now that NS&I has cut its rates

National Savings & Investments (NS&I) has slashed its interest rates. There are now much better deals for your savings elsewhere, says Ruth Jackson Kirby.

Cash on NS&I document © Alamy
NS&I has left savers high and dry
(Image credit: © Alamy)

There is rarely good news for savers these days, but one beacon of light in 2020 has been National Savings & Investments (NS&I). The Treasury-backed savings bank has offered market-beating interest rates for months. But no longer. NS&I is cutting its rates on several accounts as well as significantly lengthening the odds of winning the monthly prize draw with Premium Bonds. It claims it “had no choice but to act because savers had put away billions more during... lockdown, which left it in danger of breaching its government-mandated funding limit for the year”, says David Byers in The Times.

In July alone savers deposited £9bn, nine times the normal level. Because it is backed by the Treasury, NS&I is not allowed to get too competitive; the government sets a limit on how much money it can accept each year. That limit – known as its net financing target – is £35bn. It is believed to have brought in £23bn already this year.

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Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.