Ns&i Premium Bonds Rate Increase Raises Prize Fund to 3.80%
NS&I’s ns&i premium bonds rate increase lifts the Premium Bonds prize fund rate to 3.80% from July and improves the odds of winning to 22,000 to one. More than 22 million holders are affected, with the July draw set to carry 322,000 additional prizes and more than £60 million extra in the pot.
Andrew Westhead on July changes
Andrew Westhead said NS&I is pleased to improve rates across five variable savings accounts today, and that the change reflects wider savings market conditions and helps the group meet its net financing target. For Premium Bonds holders, the practical change is narrower: the monthly draw will offer more chances to win, and the prize fund rate will move back up after last month’s cut from 3.6% to 3.3%.
Westhead also said Premium Bonds offer “the monthly excitement of tax-free prizes with 100% security backed by HM Treasury, and the flexibility to withdraw at any time. So, I’m pleased that from July we can improve both the prize fund rate and the odds meaning even more chances to win for our 22 million Premium Bonds holders.”
322,000 extra prizes in July
322,000 additional prizes are expected in the July draw, including 12 more £100,000 prizes, 24 more £50,000 prizes and 49 extra £25,000 prizes. NS&I also expects around 200,000 additional £100 Premium Bond winners and 2.8 million £25 prizes, with the estimated number of £50 and £100 prizes rising by around 200,000 to more than 1.9 million.
Those changes matter because Premium Bonds do not pay a guaranteed return; the prize fund rate is the nearest thing to an interest rate on the product, but it is not guaranteed. Against that backdrop, NS&I’s move comes after the prize fund rate was cut last month, even as the average one-year fixed savings rate stands at 4.16%.
Direct Saver and ISA rates
Today’s changes also lift NS&I’s Direct Saver rate from 3.05% to 3.45%, Income Bonds from 3.01% to 3.40%, Direct ISA to 3.80% and Junior ISA to 3.70%. That means savers using NS&I’s variable accounts see an immediate change today, while Premium Bonds holders wait until July for the new prize rate and the improved 22,000-to-one odds.
The split leaves a simple decision for holders: keep money in a product that offers tax-free prize draws and instant access, or compare those odds and prizes with accounts paying a known rate. July’s draw is the first point at which the larger prize pool and better odds will show up for Premium Bonds holders.
