NS&I puts up its rates

National Savings and Investments (NS&I) is increasing the interest rates it offers on its variable rate and fixed rate products by between 0.15% and 0.25% in response to the Bank Of England base rate rise.

From October 1, the tax-free prize fund for premium bonds increases from to 2.8% to 3.0% - the fourth increase so far this year. NS&I says that the total value of prizes for winning premium bonds will have risen by nearly 50%, from £41.5m in January to £61.8m in October.

From July 1, rates payable on all its easy access savings accounts rise by 0.25% - the rates for its other fixed and index-linked savings certificates will rise with immediate effect for new purchases.

Meanwhile, the Bradford & Bingley has launched a 3-year fixed rate bond that pays a very competitive 6% (gross AER) for new and existing customers. B&B joins the Skipton in offering 6% for a 3-year fixed rate the first time since September 2001.

There is a minimum investment of £1,000 (max £250,000) - and it is being offered on a first come first served basis. B&B has also launched two other new fixed rate bonds, and a new bonus tracker bond.