In early November 2012, National Savings and Investments (NS&I) announced an immediate cut in the interest rate on their Direct ISA from 2.5% to 2.25%. The move was in line with other short-term ISA rates, which have been falling since the summer. There is no sign that interest rates will be rising soon – the money markets imply virtually no change before 2015.
If you started a cash ISA in March or April 2012, you should check what interest rate you will be earning after the first year’s anniversary. You may find that last year’s 3% becomes 0.5%.
The FSA does not regulate National Savings products.