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.
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.
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