NS&I has announced that it is increasing interest rates on both its Junior ISA and Direct ISA. Interest rates paid on Junior ISA will be increasing by 75 basis points from 2.50% AER to 3.25% AER. In addition, the interest rate paid on Direct ISA will be increasing by 15 basis points from 0.75% AER to 0.90% AER.
The decision to increase the interest rate on NS&I's Direct ISA follows the changes in the ISA market and balances the interests of our savers, the taxpayer and the stability of the broader financial services sector. The increase to the interest rate on NS&I's Junior ISA reflects NS&I’s aim of attracting younger customers and inspiring a stronger savings culture.
Jill Waters, Retail Director, NS&I, said:
“We are delighted to increase the interest rates on both our Junior ISA and Direct ISA.
“We want to ensure that NS&I is front of mind to our customers when making savings decisions, and these improved interest rates ensure that we are providing a fair rate, while guaranteeing that their money is 100% secure.
“Our Junior ISA offer gives parents and guardians a simple and straightforward way to invest for their children, at a competitive rate of interest. This will help their children build a nest egg that they can then take forward into adulthood.”
Variable rate ISAs at NS&I
|Product||Previous rate||New rate|
|Direct ISA||0.75% tax-free / AER||0.90% tax-free / AER|
|Junior ISA||2.50% tax-free / AER||3.25% tax-free / AER|
Notes to Editors
- NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments to 25 million customers. All products offer 100% capital security, because NS&I is backed by HM Treasury.
- Tax-free means that the interest or prizes are exempt from UK Income Tax and Capital Gains Tax
- AER stands for Annual Equivalent Rate and enables the comparison of interest rates from different financial institutions and across different products on a like-for-like basis. It illustrates what the annual rate of interest would be if the interest was compounded each time it was paid. Where interest is paid annually, the quoted rate and the AER are the same.
- Information on our products can be found here .