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You can find the current article at its original source at http://www.guardian.co.uk/money/2012/aug/15/nsi-early-withdrawl-penalties
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| Version 3 | Version 4 |
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| NS&I to impose early withdrawal penalties | NS&I to impose early withdrawal penalties |
| (8 days later) | |
| National Savings & Investments has announced changes to its range of fixed-rate bonds, which will see loyalty bonuses removed and the introduction of early withdrawal penalties. | National Savings & Investments has announced changes to its range of fixed-rate bonds, which will see loyalty bonuses removed and the introduction of early withdrawal penalties. |
| The organisation, which has become a haven for savers as deposits are backed by the government, said the changes would not lead to the reduction of interest rates, and that they brought the range in line with more recent products. | The organisation, which has become a haven for savers as deposits are backed by the government, said the changes would not lead to the reduction of interest rates, and that they brought the range in line with more recent products. |
| The interest rate structure will be changed on NS&I's index-linked and fixed-interest savings certificates, as well as its children's bonus bond. Currently, savers in the first two accounts are paid an escalating interest rate each year they hold the products, while the children's account pays a final bonus. | The interest rate structure will be changed on NS&I's index-linked and fixed-interest savings certificates, as well as its children's bonus bond. Currently, savers in the first two accounts are paid an escalating interest rate each year they hold the products, while the children's account pays a final bonus. |
| From 20 September 2012 all new issues will move to a flat interest rate. The children's account, which will have its name changed to the children's bond to reflect the new structure, currently pays 1.85% a year for five years and 3.56% when it matures – which equates to 2.5% AER. In future it will just pay 2.5% AER. It will no longer be available from Post Office branches. | From 20 September 2012 all new issues will move to a flat interest rate. The children's account, which will have its name changed to the children's bond to reflect the new structure, currently pays 1.85% a year for five years and 3.56% when it matures – which equates to 2.5% AER. In future it will just pay 2.5% AER. It will no longer be available from Post Office branches. |
| The index-linked accounts will still have a variable rate of interest attached to RPI, but a second element of the interest which currently increases each year will become a flat rate. | The index-linked accounts will still have a variable rate of interest attached to RPI, but a second element of the interest which currently increases each year will become a flat rate. |
| Instead of being encouraged to retain their fixed-term savings accounts by the carrot of higher interest rates in later years, NS&I will introduce a stick in the form of early withdrawal penalties, similar to those it already charges on its guaranteed growth and income bonds. | Instead of being encouraged to retain their fixed-term savings accounts by the carrot of higher interest rates in later years, NS&I will introduce a stick in the form of early withdrawal penalties, similar to those it already charges on its guaranteed growth and income bonds. |
| Savers who want to access their cash will lose 90 days' interest. On top of this, those with index-linked accounts will lose all of that year's index-linked element, even if they only make a partial withdrawal. | Savers who want to access their cash will lose 90 days' interest. On top of this, those with index-linked accounts will lose all of that year's index-linked element, even if they only make a partial withdrawal. |
| Only the children's bonus bond is currently on sale as NS&I seeks to keep down inflows of cash to hit its target of 0% growth over the year, but other account holders will be given the option to roll-over their money on the new terms when their savings mature. | Only the children's bonus bond is currently on sale as NS&I seeks to keep down inflows of cash to hit its target of 0% growth over the year, but other account holders will be given the option to roll-over their money on the new terms when their savings mature. |
| NS&I is sending out information packs outlining the changes and customers' options when their current holdings mature. | NS&I is sending out information packs outlining the changes and customers' options when their current holdings mature. |
| John Prout, retail customer director at NS&I, said: "None of these changes impact customers until the end of an investment term. Even then we believe the changes will be of limited impact for most people, and they need to take absolutely no action before they receive a maturity letter. | John Prout, retail customer director at NS&I, said: "None of these changes impact customers until the end of an investment term. Even then we believe the changes will be of limited impact for most people, and they need to take absolutely no action before they receive a maturity letter. |
| "We are working very hard to ensure we provide clear and timely information, and when customers receive their maturity letters it will be important for them to familiarise themselves with the details of the changes." | "We are working very hard to ensure we provide clear and timely information, and when customers receive their maturity letters it will be important for them to familiarise themselves with the details of the changes." |
| NS&I said it would also be making more information available to savers about their holding, and improving access to the products. However, a spokesman confirmed it was not expecting to be able to sell the fixed-rate accounts to new customers in the current financial year. | NS&I said it would also be making more information available to savers about their holding, and improving access to the products. However, a spokesman confirmed it was not expecting to be able to sell the fixed-rate accounts to new customers in the current financial year. |
| Sylvia Waycot of Moneyfacts.co.uk said the message from NS&I was "confusing" and added: "The lack of new investment opportunities in this announcement will be a huge disappointment to many savers who long for the safety net they feel NS&I provide." | Sylvia Waycot of Moneyfacts.co.uk said the message from NS&I was "confusing" and added: "The lack of new investment opportunities in this announcement will be a huge disappointment to many savers who long for the safety net they feel NS&I provide." |
| Top savings accounts | Top savings accounts |
| Skipton BS | Skipton BS |
| Manchester BS | Manchester BS |
| West Brom BS | |
| Powered by MoneySupermarket for the Guardian | Powered by MoneySupermarket for the Guardian |