Government-backed savings provider NS&I is to increase interest rates on its variable products from today (25 Oct).

The provider says more than 2.7m will benefit.

NS&I says the interest rate paid on Direct Saver and Income Bonds is now at the highest levels in over a decade, with the rate on its Direct ISA at its highest level since February 2014.  

The Direct Saver rate will rise by 60 basis points from 1.2% to 1.8%. Income bonds will also go up by the same amounts.

NS&I announced on 27 September that the Premium Bonds prize fund rate would increase from 1.40% to 2.20% from this month.

NS&I will also increase the interest rates on its Junior ISA and Investment Account.

The interest rates paid on Guaranteed Growth Bonds, Guaranteed Income Bonds and Fixed Interest Savings Certificates will also be increased from 1 December. The new rates on these products will only be available to existing customers with maturing investments as they are not currently on sale.

NS&I chief executive, Ian Ackerley, said: “Some of the rates we’re now paying – including on Premium Bonds – are the highest that they have been in over a decade, which is great news for savers.”

Variable rate savings products changes

Source: NS&I

Fixed term savings products (currently not on sale)

 Source: NS&I