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It may be one of the safest places, but you won't get rich by having your cash in National Savings & Investments (unless you scoop a Premium Bonds jackpot).
This week, NS&I slashed rates on some of its popular products by up to 1.35% - this means many variable-rate products give a return of less than 1%.
Its Cash Isa pays 0.9% (down from 1.4%); its Direct Isa 1.8% (down from 2.3%); its Easy Access Savings Account between 0.3% (for deposits of between £100 and £9,999) and 0.7% interest (£50,000-plus). The top rate on the Investment Account is a measly 0.5%.
Rates on two- and five-year fixed interest savings certificates have fallen to 0.95% and 1.9% - equivalent to 1.58% or 3.17% gross for higher-rate taxpayers. The Children's Bonus Bonds' rate is 2.3%. The premium bond "prize fund rate" is unchanged at 1.8%, and will be held for at least the March 2009 draw.
The government-backed institution blames the falls on the Bank of England rate cuts and a drop in "gilt yields" - the returns from government bonds. The changes to fixed rates announced this week do not affect savings already invested in the fixed-rate range.
Nationwide yesterday launched a range of bonds paying up to 3.75%. To get that, you need to stash £50,000 or more in one of its four-year fixed-rate bonds. If you haven't got that much, rates start at 3.5% from £1. Its one-year fixed-rate bond pays 3.05%-3.35%.
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