"This year we have agreed to broadly balance the funds coming into NS&I with the funds leaving us," Chief Executive Officer Jane Platt said in a statement.
"We've seen a significant amount of money invested in these products over recent months and so we've taken the difficult decision to withdraw the savings certificates from general sale and reduce the interest rate paid on our direct saver and income bonds," she said.
The savings bank is set up to offer government-backed certificates with its profits limited in order to encourage savings, The Daily Telegraph reported.
The rate cuts, however, were "another door slammed in the face of savers," said Andrew Hagger, a personal finance consultant at Moneynet.co.uk.
"Consumers who have been increasingly relying on the one surefire way of protecting their nest egg from inflation will be dismayed that the government has, without any warning, pulled the rug from under their feet," he said.
Copyright 2010 United Press International, Inc. (UPI).
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