It’s time to cash out your NS&I savings and move your money here… but there’s one type of account you MUST stick to: SYLVIA MORRIS

I would think about dropping your NS&I savings accounts at the end of this week.

On Friday, the interest rate on National Savings & Investment’s popular, easy-to-access account, Direct Saver, will fall to 3.5pc. It’s a big drop driven by the government’s savings arm – down from 3.75pc. and 4 pc. earlier this year.

The interest rate on the Income Bond will also decrease, from 4.69 pc. to 3.44 pc. This account has proven particularly popular with retirees who value income from their savings because it pays interest every month.

The shocking cuts come close to NS&I’s cuts to its fixed-rate bonds. Here it offers only 3.95 pc. to savers who want to renew their one-year bonds that are maturing. It is a huge blow for savers, as the offer of 4.35 pct. fell from mid-October to the beginning of this month. In July the interest rate offered was a tempting 5.15 pc. On bonds with a term of two years you can now save a paltry 3.6 pct. and 3.5 pc in three years. to get.

This wave of cuts means you can get a better deal elsewhere. So where should you move your money?

You can get a significantly better rate than NS&I’s Direct Saver from online bank Chetwood. It offers a price of 4.71pc, which gives you £121 more interest per year on £10,000.

Atom Bank Instant Saver Reward is another good option, but only if you plan to withdraw money from your account occasionally. The bill pays an impressive 4.85pc. in the months when you do not make withdrawals, and 3.25 pct. in the months in which you do withdraw money.

These two accounts are also a good swap for NS&I’s Income Bond for those who prefer to receive interest monthly. They pay 4.61 pc respectively. and 4.75 pc. if interest is received monthly, compared to 3.44 pc. from NS&I.

If you prefer an account available on the High Street, look at your local building society. Kent Reliance, for example, pays 4.35pc; Cambridge BS, 4.25 pieces; and Family BS, 4.65 pcs. Or Co-op Bank will pay you 4.59pc, as long as you withdraw money once a year.

You can earn around £85 more interest on every £10,000 you move from a fixed rate NS&I bond to a more competitive rival. For example, you can save 4.8 pct. for a year with Ziraat Bank via the Raisin UK savings platform, or 4.77 pct. at the new bank Vida Savings.

High street rates are lower, but it’s still worth the switch, with shares like Kent Reliance at 4.65pc. and Mansfield BS for 4.4pc.

Savers with large amounts sometimes prefer to stay with NS&I, even if the interest rate is lower. This is because all your cash is protected by the government – ​​at a bank or building society, only the first £85,000 is protected under the Financial Services Compensation Scheme. Some savers would rather keep a large balance with NS&I than take the risk with another provider or go to the trouble of opening multiple accounts to spread the risk. However, for these savers there is another good option. Online savings platforms such as Hargreaves Lansdown, Flagstone, Raisin UK and Savings Champion allow you to keep all your money on one platform and split it between different providers, each offering you £85,000 protection. If you use a platform, you only have to enter all your personal information once.

Although I would drop most of my NS&I bills, I will hold on to my Premium Bonds even if the prize money for the January draw drops. They come with the thrill of the monthly draw where you can win a big tax-free prize.

They’re also useful as a home for some readily available cash, including the amount I hand over to the tax authorities every six months, because you can get your money back in just a few days. My winnings this year yielded a decent tax-free gain of 4.9pc. Only time will tell if sticking with them is the right financial decision.

Protect your nest egg

When the savings are so hard-earned, it’s such a shame when savers allow the value of their eggs to decline in real terms.

If your savings rate is less than 2.3 pc, you lose value. Tomorrow we should know the inflation rate for the year to November. If it is even more than 2.3 pc. has risen, the value of your cash is being eroded even faster.

It’s the big banks that tend to pay these abysmal rates, and the worst are Lloyds and Halifax.

Halifax Everyday Saver and Isa Saver Variable Isa amount to 1.15pc. up to £10,000, 1.25pc up to £50,000 and 1.6pc above this level.

Lloyds Easy Saver and Cash Isa Saver also pay a ridiculous 1.15pc. on balances up to £25,000 and 1.25pc. above that. Even if you have £100,000 there, you will only earn 1.6pc.

Barclays will pay just 1.26pc from mid-February. for its easy-to-access Everyday Saver and its Instant Cash Isa.

HSBC’s flexible savings rate will fall to 1.5pc from January 27, while Loyalty Cash Isa will be 3pc at best. pays.

NatWest Flexible Saver and Cash Isa start at 1.5pc. on balances up to £25,000. The best you can do with the Cash Isa is 2.8pc. on £25,000 or more, while it is 2pc. pays between £25,000 and £100,000 on its Flexible Saver. Santander Everyday Saver and Isa Saver are at 1.2pc

Plum deal

Plum has increased its easy-to-access, app-based Isa rate to 5.18pc. Despite the higher rate, I would still choose the Trading 212 account, which now costs 4.9pc. pays after an interest rate cut of 5.17 pc.

The Plum account limits withdrawals to three per year; if you withdraw more money, the rate drops to 2.5 pc. And the interest rate is increased by a bonus of 1.39 percentage points for twelve months, after which it drops to 3.79 percent. And don’t bother moving cash because you’ll already benefit from the higher rate. Plum pays just 3.79pc. on transfers, not the main prize 5.18 pct.