It could pay you not to reinvest your maturing savings certificates.
National Savings & Investments (NS&I) Savings Certificates have been unavailable to new investors for many years. However, NS&I have continued to offer them to owners of maturing certificates. The latest NS&I accounts show that there was over £22 billion still held in certificates at the end of March 2023.
Return rates neglected
Perhaps because there are no new investors and many of the reinvestments are automatic, NS&I do not review the returns offered on certificates as regularly as their currently marketed products. For example, the last rate increase to fixed rate certificates was made on 1 February 2023, when the Bank of England Bank Rate was 3.5%.
In July, NS&I amended the terms of new fixed rate and index-linked certificates to remove the option of early encashment, even with an interest penalty. That loss of flexibility leaves the certificates looking even less competitive against other more widely available products.