NS&I to increase Premium Bond rate to 24-year high

The Government-backed institution is set to add £66 million to the prize fund each month.

National Savings and Investments (NS&I) will increase its Premium Bond prize fund rate to 4.65% AER from next month. The rate currently sits at 4% AER, but after this increase it will stand at a 24-year high.

“Premium Bonds are one of the nation’s favourite savings products,” said Dax Harkins, Chief Executive at the NS&I.

“These rate increases will help ensure that our savings products remain attractive to customers,” he said.

The increase is set to add an extra £66 million worth of monthly prizes to the fund. This means the odds of winning a prize will drop to 21,000 to one. Currently these odds stand at 22,000 to one.

In addition, the number of £25 prizes will be reduced by almost 700,000 and be reallocated to more valuable winnings.

Both the £50 and £100 prizes combined will increase by over 930,000 while there will be 13 more £100,000 prizes to win.

In addition to its Premium Bond prize fund rate, the NS&I will also be making increases to its Income Bonds, Direct Saver, Direct ISA, Junior ISA and Investment Account.

These are all variable savings accounts, and all these increases will take effect from the following Friday.

The Direct Saver is an easy access account, and even with the increase it will pay one percentage point less than the best rate in this corner of the market.