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Do you know why NS&I's savings products attract millions of Britons?
National Savings and Investments (NS&I) is a British state-owned savings bank with a long history. It was founded in 1861 and was formerly known as the Postal Savings Bank. Over time, NS&I attracted millions of UK savers thanks to the range of savings products it offered and the benefits of guaranteed deposits. In today's economic environment, more and more people are looking for safe and reliable ways to save, which has brought considerable appeal to NS&I.
The source and importance of funds
NS&I's main goal is to attract funds from the British public to support the government's financial needs. According to reports, by 2017, the funds raised by NS&I met the government debt ratio at about 9%.
"It's not just about saving money, it's about contributing to the country."
The appeal of savings products lies in the promise of 100% deposit guarantee, which provides a sense of security to many savers who are uneasy about market fluctuations. As economic uncertainty increases, various investment and financial products are frequently discussed. For savers pursuing safe returns, NS&I's isolation products have gradually become a stable rule for their profits.
Diversified savings products
NS&I offers a variety of savings and investment products, such as Premium Bonds, Direct ISA and Junior ISA. Among them, Premium Bonds stimulated many people’s interest and participation in the form of random draws.
"In the minds of many people, buying Premium Bonds is not just for savings, but to experience unexpected surprises."
Not only are these products rapidly penetrating every corner of the market, they also enable savers to accumulate wealth in a tax-free manner. For teenagers, Junior ISA allows the younger generation to learn the importance of financial management from an early age and start saving early.
NS&I model and operation
NS&I's management style has always been well received. Since 1999, it has outsourced operations to several private companies, such as Siemens and Atos, to increase efficiency and reduce costs. Despite this, NS&I maintained control over product design and marketing.
"The decision to outsource operations is to accelerate the modernization of services and enhance customer experience."
Through this public-private partnership model, NS&I can not only maintain basic operating expenses, but also provide more competitive products to savers based on efficient allocation of resources.
Market competition and positioning
While improving customer appeal, NS&I strives not to interfere with competition in the market. It does not offer the most attractive interest rates in the market, but rather sets reasonable interest rates to ensure continued capital inflows. Under this operating model, NS&I maintains its positioning as a government-backed thrift institution, capitalizing on the potential of the market and maintaining a healthy supply chain for the nation's economy.
"Although our interest rates are not as attractive as some commercial banks, our safety and stability are our biggest selling points."
Future Outlook
Looking to the future, NS&I still adheres to its core values and mission and is committed to providing savers with safe and reliable savings solutions. At the same time, we hope to use digital transformation to attract the attention of the younger generation again and let more people understand the benefits of NS&I. However, in the face of economic changes, how will NS&I adjust to cope with challenges and demands from all parties?
As the market changes, can NS&I maintain its appeal to millions of Britons and find a balance between safety and profitability?
