NS&I Interest Rate Cuts – Providing A Solution To Your Clients

10,000 individuals hold more than £1m on deposit with NS&I. 67,000 hold deposits in excess of £250,000 and a million individuals hold NS&I deposits of £50,000 or more. With NS&I cutting its rates from Tuesday 24 November, these affluent clients will be looking for an alternative that offers them not only better returns, but also comparable levels of protection.

National Savings & Investments (NS&I) interest rates will be significantly reduced from today, with NS&I’s Income Bond and Investment Account rates being cut to just 0.01%.

 

NS&I Product

 

Current NS&I
(Gross) rate

 

NS&I (Gross) rate
from 24 November

 

Income Bond

1.15%

0.01%

Direct Saver

1.00%

0.15%

Investment Account

0.80%

0.01%

Guaranteed Growth Bond (1 Year)

 

0.10%

Guaranteed Growth Bond (2 Year)

 

0.15%

Guaranteed Growth Bond (3 Year)

 

0.40%

Guaranteed Growth Bond (5 Year)

 

0.55%

Guaranteed Income Bond (1 Year)

 

0.06%

Guaranteed Income Bond (2 Year)

 

0.11%

Guaranteed Income Bond (3 Year)

 

0.36%

Guaranteed Income Bond (5 Year)

 

0.51%

Fixed Interest Savings Certificate (2 Year)

 

0.10%

Fixed Interest Savings Certificate (5 Year)

 

0.50%

Source: Moneyfacts

 

There are 10,000 individuals who holding more than £1m on deposit with NS&I, 67,000 hold deposits in excess of £250,000 and a million individuals hold £50,000 or more in cash with NS&I[1]. With NS&I cutting its rates from Tuesday 24 November, these affluent clients will be looking for an alternative that offers them not only better returns, but also comparable levels of protection.

 

Maximise interest. Minimise Risk.  

Flagstone offers exactly this solution, enabling clients to maximise the interest they’re earning on their cash and importantly empowering them to reduce their risk exposure through optimal Financial Services Compensation Scheme (FSCS) utilisation[2].

 

FSCS protection of up to £3.57m for joint account holders

Flagstone’s secure, user-friendly platform gives clients access to hundreds of deposit accounts from 46 banks through a single application, enabling them to quickly and easily achieve exceptional diversification; with private clients able to benefit from full FSCS protection on deposits of up to £1.79m[2][3] and joint account holders up to £3.57m[2][3].

With the rate reductions coming into effect from today and with many clients using the extra time available to them during ‘lockdown’ to organise their finances and plan for what might lie ahead, now could be the ideal time to discuss how you can help them to protect their cash and improve their returns from it, by introducing them to Flagstone.

 

Generate value for your clients and your practice with Flagstone  

The material benefits of using the platform are immediately visible and future value is easy to illustrate. Moreover, introducing clients to Flagstone enhances your understanding of their holistic wealth, with ongoing visibility of their cash portfolios and maturity/liquidity events providing you with regular opportunities to discuss how their cash can be re-invested when market conditions are right.

 

The time to act is now

The consequences of NS&I’s rate cut announcement will be felt in the wider market in the coming weeks. Banks will no longer be competing on rate with NS&I to attract retail deposits from savers, so it’s important that clients act quickly to secure best-in-market fixed term rates, before they’re reduced. Locking in a fixed term inflation-beating rate now means that the deposit won’t be affected by any falls in market rates over the account’s term and gives peace of mind that the value of the deposit isn’t being eroded by sitting in a suboptimal account.

Fixed term deposit rates currently available on the Flagstone platform include:

  • 0.81% 6 Month Fixed Term Deposit Account[3]
  • 1.00% 12 Month Fixed Term Deposit Account[3]
  • 1.20% 24 Month Fixed Term Deposit Account[3]
  • 1.30% 36 Month Fixed Term Deposit Account[3]
  • 1.50% 60 Month Fixed Term Deposit Account[3]

Hundreds of Instant Access Accounts and Notice Accounts are also available on the platform to enable clients to easily plan and manage their liquidity requirements, with market-leading and exclusive rates including:

  • 0.80% Instant Access Deposit Account[3]
  • 0.80% 35 Day Notice Account[3]
  • 0.95% 45 Day Notice Account[3]
  • 0.95% 95 Day Notice Account[3]

 

Speak to Flagstone

Flagstone is here to provide you and your clients with a solution for cash, and to ensure that you retain ongoing visibility of the asset in order that you can continue to deliver holistic, timely advice. For more information, please don't hesitate to contact us.

 

1 Source: NextWealth, ‘Giving Credence to Cash: Why It’s Time for Financial Advisers to Challenge Their Assumptions’

2 As at 23/11/2020 Financial Services Compensation Scheme (FSCS) deposit protection is £85,000 per depositor per authorised bank (and £170,000 for joint account holders). For more information go to www.fscs.org.uk. Incremental FSCS protection is achieved by diversifying deposits into accounts with different authorised banks.

3 Correct as at 23/11/2020. Rates are subject to change or withdrawal and are shown gross of Flagstone's Annual Management Charge, illustrating what the interest rate would be before the management fee is deducted. For Fixed Term Deposit Accounts, interest is paid at the end of the term. For details of how interest is paid on Instant Access Accounts and Notice Accounts, please refer to the Terms & Conditions for the specific account available on the platform. The minimum deposit required to open a platform account is £250,000. Dependent upon whether you are an individual, looking to open a joint account, or acting on behalf of a company, charity, trust, SIPP or SSAS; different banks, accounts and rates will be available to you on the platform. The number of accounts available to clients may also be reduced dependent upon their domicile, residency and other factors. To receive a personalised illustration for your deposit, use our online illustration tool.  

 

Access our exclusive rates on the Flagstone platform

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