The rate on First Option Bonds has been cut immediately from 6.25 per cent to 6 per cent gross, although the bonus for amounts over pounds 20,000 remains at 0.25 per cent. The rate paid on Income Bonds comes down from 6.25 per cent to 6 per cent from the end of August, and interest on Investment Accounts has also been scaled down by 0.25 per cent to 4.75 per cent on amounts under pounds 500 and 5.25 per cent on sums up to pounds 25,000.The reductions reflect the fall in yields on gilt-edged stock following the last cut in base rates, but there have been two cuts in base rates since National Savings rates were last changed in January, Angela Knight, Economic Secretary to the Treasury, explains.Bond rates have also been drifting downwards in the last few weeks, but have now steadied, according to Baronworth Investment Services, and no major downward changes are anticipated in the near future.The best one-year rate on amounts under pounds 3,000 is 3.05 per cent from Premium Life, and on up to pounds 5,000 4.62 per cent from Pinnacle Insurance. Many have yet to decide what this will be.ProShare provides a free guide to Crest to anyone sending a stamped self-addressed envelope to ProShare, Library Chambers, 13-14 Basinghall Street, London CE2V 5BQ.. Brokers are likely to make an extra charge for handling share certificates. Investors could find the prices offered for buying and selling shares for will not be as keen as those they see on the stock market screens - maybe an extra penny or more either way. In reality, most private investors settle within 10 to 20 days after the deal.Under Crest, the cost of dealing for investors who retain their share certificates will increase.

Some time in the next year or so, Stock Exchange dealings are expected to move to T+3, settlement within three days of the transaction.Because of all the paperwork involved, it will be impossible to physically transfer share certificates and money in this time. Others, however, will be charging for the service which could be as much as pounds 70 or more.And what of the millions of investors who will not be making the change, keeping their share certificates? The only difference they will notice under Crest is when they eventually come to sell their shares.At present, the transfer of cash for buying or selling shares is meant to be settled five days after the transaction, called T+5. "Effectively the investor is setting up his own electronic record, with his or her own name on the register," says Tim May."Ideally all investors should be sponsored members," says Gill Nott, "and keep their own name on the company registers".But do beware. Not all private client stockbrokers are offering the sponsored membership to clients. There are also significant differences in what those brokers offering the service will charge for the facility Crest is charging pounds 20 for each sponsored member. Brokers such as Carr Sheppards and Brewin Dolphin are absorbing this and not making any charge to the client.

"Shareholdings can be checked independently via the company registrar in a way that cannot be done with pooled accounts.""If you elect to go into a nominee account," warns Gill Nott, chief executive of ProShare, which promotes wider share ownership, "ask your broker if he will send you information from the company, such as scrip dividends, notice of rights issues, and so on."If investors want to retain title to their shares, having a traditional relationship and receiving notices directly from their companies, they can become a sponsored member. This is a new kind of account to allow dealing to occur electronically through the stockbroker. This means the broker will be sent the requisite number of accounts or perks for distributing to investors."If designated, the investor can be identified and dealt with directly," comments Tim May. Some companies, for example, will not offer perks or more than one annual report to nominees.Some brokers offer "designated" nominee accounts rather than "pooled" ones. Annual reports, other notices or communication and company perks are usually only offered to those names on the share register.

This will change the investor's relationship with the company Although the client is the beneficial owner the name that appears on the share register will be that of the nominee, the legal owner.This could cause potential problems. If they are happy to have the broker deal with everything and do not want a direct relationship with the company they are investing in, they can put their securities into a nominee account.This will mean the broker collecting together shares on behalf of many private investors, with only the broker's name appearing on the company's register. They should hold on to their share certificates.Even those who do use a stockbroker but do not trade actively, should stay as they are. "If you are not going to trade, stay in paper," says Tim May of Carr Sheppards, another leading firm of private client stockbrokers.The impact of Crest is going to be felt by those who use a stockbroker to trade in shares, dealing more than a few times a year,whether they use an execution-only service or the more traditional kind of stockbroker. Because of all the privatisation issues, most have bought their shares in the high street through their banks, building societies or other share shops or through newspaper advertisements and do not have a relationship with a stockbroker.Despite the introduction of Crest, nothing need change for these investors.