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NS&I makes changes to ISAs and Premium Bonds
The government-backed savings organisation is revamping its product range.
by Michelle McGagh on Jan 24, 2013 at 09:41
NS&I has announced changes to its savings range, including lowering the minimum amount that can be saved into its Direct ISA.
As part of its modernisation programme, government-backed NS&I has said it will be transferring customers holding its T Cash ISA, formerly known as the Tessa-Only ISA, and its Cash ISA – which have been closed since 1999 and 2009 respectively – into its Direct ISA.
The T Cash ISA and the Cash ISA both currently pay 0.5% compared to 2.25% for the Direct ISA. In November the rate offered on the Direct ISA was cut from 2.5% to 2.25%.
Transfers will be made on 25 May 2013.
It has also lowered the minimum investment amount for the Direct ISA from £100 to £1 to make it more accessible.
There are also changes to Premium Bond investments. From 1 April 2013 savers will only be able to invest in Premium Bonds by cheque and debit card at the counter, or directly from NS&I by post, phone, online or standing order.
NS&I said the number of customers investing by post, phone and online directly with the organisation has increased and subsequently it has withdrawn all products, except Premium Bonds, from the Post Office.
Jane Platt, chief executive of NS&I, said: ‘Since 2007 we have been working to simplify and modernise our range of savings products and to encourage our customers to invest with us directly.
‘From 25 May 2013, customers holding our Cash ISA will benefit from the much higher interest rate paid on our Direct ISA. There will be some changes for our customers who use the Post Office – however, staff in our UK based contact centres will be on hand to help with the transition.’
NS&I said the changes will not only benefit savers but reduce the organisation’s budget by 10% by 2015, to meet cuts demanded in the 2010 Spending Review.
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