The maximum sum that can be invested in premium bonds rises to £40,000 on Sunday 1 June 2014, up from £30,000.
Because every pound invested buys a £1 bond that is entered into a monthly prize draw, if a maximum limit investor took advantage of the new limit, their odds of winning a cash prize would by increase by a third.
Cash prizes range from £25 to £1 million and from the August draw onwards the number of £1 million prizes doubles to two.
National Savings & Investments, which operates premium bonds, is also making it easier for customers to buy them and get hold of their winnings.
Existing customers can now buy more bonds by bank transfer directly to NS&I, while all customers can sign up to have their winnings paid directly into their account.
In the 2015/16 tax year, the maximum amount that can be invested in premium bonds will rise again to £50,000.
The bonds, which are guaranteed by the Treasury, have grown in popularity. In 2003 £19.7 billion was invested in them, compared to £45.7 billion today – or an increase of 131%.
Greater chance of winning
Julian Hynd at NS&I said: "Premium bonds are one of the nation's favourite ways to save. Raising the maximum amount that can be invested is good news for customers because the more they invest, the greater their chance of winning a tax-free prize. I'm sure many of the 600,000 customers who currently have the maximum holding of £30,000 will want to invest more."
To buy premium bonds, call NS&I on 0500 500 000 or apply online at nsandi.com. You can also apply in your local Post Office or by post.
Facts and figures about premium bonds
- Since the first prize draw in June 1957, more than290 million tax–free prizes have been paid out
- Prizes are picked out by ERNIE, the Blackpool-based random number generator
- In May 2014, ERNIE paid out over 1.8 million prizes, together amounting to over £51 million in value.