I predicted these NS&I cuts were on their way… and I was right. This is what’s coming next, the future for Premium Bonds and the steps you must take: SYLVIA MORRIS

National Savings & Investments (NS&I) has cut rates on two of its easy-access accounts – just as I predicted it would.

It joins other providers in cutting rates after the Bank of England lowered the base rate from 4 pc to 3.75 pc last month.

But the Premium Bond prize rate remains unscathed at 3.6 pc, as does its Direct Isa at 3.5 pc.

I still think these could be cut soon, however.

Hundreds of thousands of savers with NS&I will see less interest when the new rates come in on February 12.

The rate on its Income Bonds, popular with some 222,000 pensioners, as the account pays out interest monthly rather than annually, will fall to 3.01 pc from 3.26 pc.

Down, too, will go Direct Saver from 3.3 pc to 3.05 pc, hitting 430,000 savers. If you open an account now, you won’t avoid the lower rate from the middle of next month.

Unlike some providers, NS&I pays the same rate to all savers in the account rather than different rates depending on when you opened it. That means if you leave your savings in these accounts, you’ll be losing money in real terms. This is because the rates are now below the rate of inflation, which rose from 3.2 pc to 3.4 pc last month. Your money in these accounts will be losing their spending power as the interest is not enough to cover increased prices.

The cuts were inevitable because other providers slashed rates and money is piling into NS&I. So, how do the new rates compare to the competition?

If a well-known name is your priority, then stick with NS&I. If you are happy with newer banks, move.

New banks are keen to grow market share and attract cash, so have held their rates.

For example, Spring, the app-based account run by Paragon Bank, pays 4.11 pc. This rate has not been cut following December’s fall in base rate, so could be in line to go down soon to 3.86 pc if it passes on the fall in full.

This is a whole lot better than the NS&I rate.

And it beats NS&I Income Bonds at 3.01 pc for those who want monthly takings, with Spring paying 4.03 pc.

But if you prefer to stick to the big names, then NS&I still comes out top. That’s because the likes of Halifax, Lloyds, Santander, NatWest, HSBC and Barclays all pay much less. The worst rate is 0.75 pc from Halifax Everyday Saver and Lloyds Easy Saver.

Cash Isa that should keep you on track

I am happy to see Family Building Society has re-opened its Market Tracker Cash Isa to new savers with a rate of 4.03 pc.

You can earn more if you are willing to open an account through an app – that’s Atom at 4.25 pc or Trading 212 at 4.38 pc, including a 0.78 percentage point bonus paid for 12 months.

And you can squeeze a tiny bit more from an online account such as Cynergy Bank Online Isa issue 61 at 4.1 pc.

But what I like about the Family BS Isa is that it tracks the rate paid by the top 20 accounts on £10,000, taking their average and adding 0.05pc.

And with this Isa you know what your rate is for three months. You can open online, by post at or by visiting its branch in Epsom, Surrey, with a minimum £1.

The only drawback for some is that it is not a flexible cash Isa.