National Savings and Investments (NS&I) has recently announced that it is reducing its interest rate on its Direct ISA product by 25 basis points from 1% tax free to 0.75% tax free from 24 September 2018.
The firm has said that its decision to reduce the interest rate on Direct ISA was taken in order to deliver positive value for taxpayers. NS&I sets its interest rates to balance the interest of its savers, taxpayers and the stability of the broader financial services sector.
It has said that it will contact all current Direct ISA customers at least two months in advance to warn them of the change.
NS&I retail director Jill Waters said: “We have taken the decision to reduce the interest rate on our Direct ISA to deliver positive value for taxpayers. As part of our operating framework, we must ensure that we continue to strike a balance between the needs of our savers, taxpayers and the stability of the broader financial services sector.
“Our Direct ISA continues to gives savers the opportunity to earn a fair rate and benefit from tax free interest, while deposits into all NS&I products are 100% secure, as NS&I is backed by HM Treasury.”
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