NS&I relaunches its Investment Account
National Savings & Investments' Investment Account has gone back on sale today, paying a higher rate of 0.75% before tax (0.6% after tax). It had previously paid 0.2%.
As part of its modernisation process, NS&I has withdrawn the account from sale at the Post Office and switched it into a postal account.
But savers get a better deal with NS&I's telephone and internet-based Direct Saver. It pays a higher 1.5% (1.2%).
Meanwhile new internet bank GE Capital Direct - a UK company ultimately owned by American giant General Electric - has launched two easy access savings accounts.
The GE Capital Direct Saver pays 2.35% (1.84%) with no initial bonus to boost the rate.
If you are willing to move your money around each year, the new bank offers a second account paying 2.65% (2.12%). The rate is bolstered by a 1.15 (0.92) percentage point bonus which lasts for a year. There are no withdrawal restrictions on either account.
The bank pledges to write to customers when the bonus is about to run out so they can switch easily online to another account then offered by the bank.
It also promises good customer service combined with simple easy to understand products. Its research revealed this is what savers want rather than complicated products with reams of onerous terms and conditions.
Money deposited with the bank is covered by the UK Financial Services Compensation Scheme, which covers savers on up to £85,000 of their savings - or £170,000 on joint accounts - if the bank fails.
But cuts continue on top paying easy access accounts. West Bromwich Building Society, the sixth largest, cut rates on it top paying accounts to both existing and new savers.
Savers in its internet-based WeBSave Plus2 earn 2.56% (2.05%) from today, down from 2.81% (2.25%).
The top internet-based account comes from Coventry Online Saver 3 at 3.15% (2.52%) including a 1.15 (0.92) point bonus for the first year. Savers are limited to making four free withdrawals in a 12-month period.
Saga has cut the rates it pays new savers opening a telephone-based savings account.
Its new Telephone Saver Issue 4 pays 2.4% (1.9%) including a bonus, down from 2.75% (2.2%) on its previous issue.
Its new Internet Saver pays 2.6% (2.08%) including a bonus. Both rates drop to 0.5% (0.4%) once you have been in the account for a year.
Last week Virgin Money, Sainsbury's Bank and AA Savings cut their top rates on easy access accounts.
This article was written for our sister website Money Observer
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.