Interest rates paid by NS&I on Direct ISA accounts were increased today from 2.15% tax exempt/AER to 2.40% tax exempt/AER.
Over 333,000 NS&I customers will benefit from this increase.
The savings organization last raised rates on its direct ISAs in January of this year, and also on its direct saver and income bonds in February.
NS&I said, “The changes made to NS&I’s Direct ISA will ensure that the product is priced appropriately compared to other ISA markets.”
But the most competitive cash ISA (with no withdrawal limits) in the market currently pays a hefty 3.5%, said Sarah Coles, head of personal finance at Hargreaves Lansdowne.
He said: “NS&I’s Easy Access Cash ISA is trying to catch up, but it still lags far behind the market. It’s nothing to get excited about.
“Not only does it lag significantly behind the most competitive deals, it also falls well short of the 2.85% offered by other easily accessible offerings.”
Furthermore, she added: “NS&I does not want to blaze past the rest of the population. We want to be somewhere in between to balance the needs of savers and taxpayers.”
“This change will help NS&I continue to balance the interests of savers, taxpayers and the broader financial services sector,” NS&I said.
NS&I’s Direct ISA will allow clients to invest from £1 up to £20,000 for the tax year 2023-24.
NS&I Floating Rate Savings Products
product
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Previous Interest Rates (from 24.01.2023 to 15.05.2023)
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Interest rates from today (16 May 2023)
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Direct ISA
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2.15% Duty Free/AER
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2.40% Duty Free/AER
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Source: NS&I