National Savings & Investments (NS&I) has increased the rate of interest paid to savers with money invested in income bonds.
Interest is taxable but paid gross on this account. The new rates are 1.70% for sums under £25,000 and 2.0% for sums over £25,000. This is an increase of 1.0% on previous rates. Interest rates on other NS&I savings products, including Guaranteed Income Bonds remain unchanged.
The Income bond is an easy-access account which pays interest monthly. Although interest is not tax-free, it is paid gross, which will benefit savers who don’t pay tax.
The new rates are competitive for an account of this kind, comparing favourably with many easy access accounts.
Announcing the move, the government-owned organisation said: ‘NS&I constantly reviews savings products offered by other providers and has made this decision to take into account the rates available on other types of products which might be considered by income bond customers.’
To compare rates see Which? Best Buys at http://www.which.co.uk/reviews/savings-accounts/best-buy/verdict/
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