Sarah Coles, of fund manager Hargreaves Lansdown, said: “During the pandemic they really boosted everything to the top of the best buy tables. But when the Government comes knocking for emergency funds, the bank is happier to raise its rates to compete with high-street banks, albeit temporarily. NS&I typically keeps its rates below competitors to avoid distorting the savings market and to manage its own costs. NS&I also increased rates for its “Direct Saver” and “Income Bonds” accounts to 2.85pc, from 2.6pc. The effective interest rate on Premium Bonds is currently 3.3pc, having risen from 3.15pc in February, and the highest since May 2008. Increases in the target typically lead to increases in rates paid on savings accounts, as a way to incentivise savers to deposit more. Raising the national savings bank's fundraising target will help secure cheap funding for the Exchequer. Premium Bond rates are expected to rise further this year in a boost for savers.Ĭhancellor Jeremy Hunt is expected to ask National Savings and Investments to raise more money in Wednesday’s Budget – effectively using customers’ investments as loans to the Government.

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