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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.
While a traditional easy access account will pay you a set rate of interest, Premium Bonds work differently. All deposits are combined and pay out a variable rate of interest on that amount. This is then split into a range of different prizes, between £25 and £1 million, and paid out at random to its holders. One pound equals one ticket for a prize, meaning the more you deposit with Premium Bonds the more chance you have of winning the £1 million prize.
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.
The answer ultimately comes down to your appetite for risk. This, among other factors you need to consider, is explained in more detail in our guide on Premium Bonds.
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.
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NS&I has launched its British Savings Bonds, offering a three-year fixed rate of 4.15% AER for savers. See how they compare against other savings accounts.
NS&I has launched its British Savings Bonds at a fixed rate of 4.15% AER.
The Chancellor of the Exchequer, Jeremy Hunt, delivered his Spring Budget to the House of Commons yesterday. It’s anticipated to be one of the Government’s last fiscal events before a General Election takes place in less than a year’s time. Find out what some of the measures announced mean for your finances.
Find out what some of the measures announced in the 2024 Spring Budget mean for your finances.
Green Savings Bonds are now paying a lower rate of 2.95% AER after NS&I cut rates. How do they compare to other savings accounts?
Green Savings Bonds are now paying 2.95% AER after NS&I cut rates.
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Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.