Wednesday 23rd April 2008
Rate changes have been announced by National Savings & Investments (NS&I) on its variable rate products, which could see consumers earn less than was previously the case.
The level of interest paid on such holdings is determined in part by the base rate enforced by the Bank of England, NS&I explains.
As a result, there are a number of decreases due to be made following the quarter-point base rate reduction effected by the Banks monetary policy committee earlier this month.
Premium bond payouts are to drop from 3.6 per cent to 3.4 per cent - equating to a £6.6 million reduction in the total prize fund.
However, there are still two jackpot prizes of £1 million each and NS&I notes that an individual with £30,000 invested in the scheme may expect an average of 16 victories per year.
Meanwhile, Post Office has introduced a new five-year savings account which splits deposits between a guaranteed rate of return and one linked to the performance of the stock market.
The organisation explains that half of the amount paid in is to earn 5.5 per cent interest over the five years.
For the remainder, the rate of return depends on any increase in the FTSE 100 - although Post Office points out that no money will be lost should the stock market fall over the five-year period.
Should an increase be achieved, 50 per cent of any earnings are to be returned to the accountholder.
If such terms are a little too complicated, a new 6.5 per cent instant access saver from Abbey might be a simpler option.
The rate is promised to anyone with more than £1,000 in the account for up to 12 months, after which it reverts to a rate of 5.5 per cent.
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