NS&I cuts interest rates on two easy-access savings accounts – are they still worth it?

NS&I is cutting interest rates on two of its easy-access savings accounts, in another blow for savers.

The government-backed bank is reducing rates on its Direct Saver and Income Bonds products from 12 February.

It is the first time NS&I has lowered interest rates on the accounts since March 2025 and comes after the Bank of England reduced the base rate from 4% to 3.75% in December.

NS&I also said the reductions were being made to reflect changes in the wider savings market.

Matt McKenna, personal finance expert at finance comparison site Finder, said: “These cuts aren’t a surprise. NS&I already slashed the rates on eight of its fixed rate bonds at the start of January and now two of its easy-access savers will be impacted, following the general trend we’ve seen for variable savings rates after the base rate cut in December.”

We reveal who won the top Premium Bonds prizes in January here.

How will interest rates on the savings accounts change?

NS&I is lowering the rate on its Direct Saver from 3.30% AER to 3.05% AER on 12 February. The rate offered on Income Bonds will drop from 3.30% AER to 3.05% AER.

Both of the accounts are easy-access, but the Direct Saver can be opened with a minimum of £1 and can hold a maximum of £2 million. You can open an Income Bonds account with a minimum of £500 and can hold a maximum of £1 million.

Interest is paid yearly on the Direct Saver while it is paid monthly on the Income Bonds account.

How do NS&I’s savings accounts compare with other savings products?

Savers with a Direct Saver or Income Bonds can currently find better rates elsewhere, even before the change.

The top-paying easy-access product currently on the market is the Chase saver account, according to Moneyfacts. It offers a rate of 4.5% AER variable if you open a current account with the bank, including a bonus rate of 2.25% AER fixed for the first 12 months.

After that, Mansfield Building Society is offering a rate of 4.25% on its Triple Access Bonus Saver, including a 1% bonus for the first 12 months.

See our list of the best savings rates right now.

A major perk of NS&I savings products is that they are backed by the Treasury so 100% of your capital is protected.

Any money saved with NS&I is also used by the government to invest in the UK.

However, Sarah Coles, head of personal finance at Hargreaves Lansdown, pointed out that the FSCS now protects the first £120,000 per person, per banking licence, if a bank or building society goes out of business. This is up from £85,000 previously, meaning NS&I now has less of a pull for smaller-scale savers.

In any case, you want to ensure you are holding money in a savings account that is paying higher than the rate of inflation, which came in at 3.4% in December 2025, otherwise your cash is being eroded in real-terms.