National Savings & Investments (NS&I) is to cut rates and axe savings certificates, in an effort to bring it in line with the rest of the marketplace.

Both Fixed Interest and Index-Linked savings certificates have been withdrawn, while interest rates on its Direct Saver and Income Bonds will be cut by 0.25 per cent.

NS&I said the move came after unprecedented sales volumes for the products in recent months.

Jane Platt, chief executive at NS&I, said it had to act in the interests of savers, taxpayers and the stability of the financial services market.

She said, ‘While doing this we are tasked with meeting the government financing objective - called our net financing target - which is set for us each year by HM Treasury.

‘This year we have agreed to broadly balance the funds coming into NS&I with the funds leaving us - in other words our net financing target is zero within a range of £2bn either side of this.’

On maturity, existing customers in savings certificates will be permitted to roll over their investments into the same issue they currently hold.