NS&I cuts fixed bond rates but one-year options remain above 4%

NS&I reduced rates on several fixed-rate bonds, with the one-year Guaranteed Income Bond down to 4.00% and the one-year Guaranteed Growth Bond at 4.07%. Other providers have also trimmed rates and a few one-year deals still pay above 4%.

NS&I has cut the rates paid on a range of its fixed-rate savings bonds this week. The one-year Guaranteed Income Bond fell from 4.13% to 4.00%, and the one-year Guaranteed Growth Bond was reduced from 4.20% to 4.07%. The move comes after other providers had already trimmed rates, and NS&I had been near the top of best-buy lists. The Bank of England data cited in the article show NS&I raised £2.45 billion in November, bringing its financial-year total to £7.57 billion against a £13 billion target. Key details: - One-year Guaranteed Income Bond: reduced from 4.13% to 4.00%. - One-year Guaranteed Growth Bond: reduced from 4.20% to 4.07%. - Within hours of NS&I's change, Virgin Money lowered its one-year fixed-rate bond to 4.01% from 4.11% for new savers. - The top one-year deals reported were Union Bank of India UK at 4.33% and Chetwood Bank at 4.26%. - NS&I's two-, three- and five-year Guaranteed Growth Bond rates were reported at 3.98%, 4.02% and 4.05% respectively; the Guaranteed Income Bonds for the same terms were 3.91%, 3.95% and 3.98%. - A tax detail noted: NS&I pays interest at the end of a fixed term, so all interest from the term counts toward the personal savings allowance in the year the bond matures (basic-rate taxpayers: first £1,000 tax‑free; higher-rate taxpayers: £500). Summary: The article reports that NS&I has trimmed several fixed bond rates and that other providers have already started to follow. It notes strong recent inflows to NS&I and that some one-year offers remain above 4%. Undetermined at this time.