NS&I raises Isa savings rate to 2.5%Cash Isa now offers competitive Best Buy rate

20 August 2009

National Savings & Investments (NS&I) has almost doubled the rate of interest paid to new savers in its cash Isa from 1.3% to 2.5%.

The raise means that its Isa is now in direct competition with leading online and high-street names, including Alliance & Leicester, currently offering 2.5% on its Which? Best Buy Direct Isa 5. Rates on other NS&I products, including fixed-interest savings certificates and children’s bonus bonds, are also being increased.

Check the NS&I website to see if you have won

Safe savings

NS&I said it had taken the decision as part of a 'pricing strategy designed to balance the interests of its savers, the taxpayer and the stability of the financial services market.’

As NS&I is government-backed, it's one of the lowest risk investment options open to savers. For more information on protecting your savings, see the .

New Isa limits

For those aged over 50, the overall Isa limit rises to £10,200 from 6 October 2009, while the portion that can go into cash will be £5,100. Limits will rise for those aged under 50 during 2010. Read the Which? guide to news Isa rules to find out more.

To compare the market-leading Isa rates currently available from Best Buys Manchester Building Society and Abbey, visit Which? Best Buy Isa reviews.

Which? Money when you need it

You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.

Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.

Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast

For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.