National Savings ISA Rate Cut Double

National Savings ISA Rate Cut Double

National Savings and Investments has been accused of landing a ‘double-whammy’ on customers after cutting interest rates twice in April.  It was responding to the recent base rate cut by the Bank of England by dropping interest paid on its direct ISAs from 5.55 per cent to 5.3 per cent.  

However National Savings and Investments also marked the start of the current financial year with a drop from 5.8 per cent on 6 April.

Our view

If Bank of England base interest rates are cut, we would expect an interest rate cut on any provider’s ISA.  It would appear though that given the fact that National Savings has been offering a consistently higher ISA rate for some time, they have clearly bought in the investments monies that they required and have now dropped rates to a more sustainable level.  This is a classic, bordering on cynical move that many cash ISA providers do regularly.

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