NS&I, otherwise known as the National Savings and Investments company, is well-known for its savings products, including Premium Bonds, which are held by millions of people across the country. The bank is often a popular choice for Britons, as any money put away with NS&I is 100 percent safe. This is because NS&I is backed by the Treasury, meaning the government itself would have to go bust before savers lost any of their funds.
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However, NS&I have decided to increase their target for savings, in a move which signals good news for savers
The Treasury has increased the bank’s target from £6billion to £35billion in a radical move.
NS&I has said the decision was taken to “reflect government finances requirements arising from COVID-19”.
The news means the bank will now be able to receive increased deposits or interest from its customers.
And it is therefore likely to follow that NS&I’s savings rates, currently some of the best on the market, will stick around.
Sarah Coles, personal finance analyst at Hargreaves Lansdown commented on the news from NS&I and what it means for rates.
She said: “Savers will be breathing a huge sigh of relief at the news that NS&I is going to be there for them through the crisis.
“The worry was that NS&I might be forced to cut savings rates, and that other competitive rates on the market would follow suit.
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“While other banks have popped up from time to time, nobody else has the capacity to cope with the huge surge in lockdown saving.”
Interest rates have taken a tumble across the board recently, as a result of the lockdown crisis.
In March, the Bank of England took the historic decision to lower its base rate to an all-time low of 0.1 percent.
This appeared to have a knock-on effect for the rest of the market with many familiar providers announcing they too would be lowering interest rates.
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The news was gutting for many savers who are looking for the best ways to make their money grow.
Many have therefore turned to the government-backed bank to help secure their finances amid this challenging time.
At present, the Direct Saver account from NS&I offers 1.00 percent interest, with the Direct ISA offering 0.90 percent tax free.
Income Bonds offer 1.15 to 1.16 percent, and the Investment Account is set at 0.80 percent.
And indeed, although Premium Bonds do not grow, the 1.40 percent interest rate helps set the prize rate fund.
Premium Bonds have the added incentive of offering a potential for Britons to become a millionaire through a prize draw each month.
It is, however, unclear how long NS&I rates will stick around for, as the bank has stated its target can be revised, depending on government requirements.
NS&I recently stated it paid out over 3.7 million prizes in the recent July Premium Bonds draw.
These prizes added up to an eye-watering total of £106million, so it is important for Britons to check whether they could be a beneficiary.
The lucky winners of any prize from NS&I can access this information through the bank’s online prize checker, through their phone, or via Amazon Alexa.
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