NS&I boosts Premium Bond prize fund and raises savings rates

Published by Adam Williams on 09 November 2017.
Last updated on 09 November 2017

NS&I boosts Premium Bond prize fund and raises savings rates

More than 25 million National Savings & Investments (NS&I) Premium Bond and savings account holders are set to benefit from increased returns as the provider makes changes to its range.

In the wake of the Bank of England’s decision to raise the base rate by 0.25% to 0.5%, the government-backed provider has announced it will increase both the number of prizes and the chance of winning with its Premium Bond prize draw.

Meanwhile, customers with variable rate savings accounts will also see the full 0.25% increase passed on to them.

Premium Bond rate boost

From 1 December 2017, the odds of winning a prize in the monthly Premium Bond draw will be boosted from 30,000 to one to 24,500 to one. At the same time the effective prize fund interest rate will increase by 0.25% to 1.4%.

This means the number of prizes paid out each month will rise from 2.3 million to 2.9 million, and the value of these prizes will rise from £68 million to about £83 million. See the table below for a full list of prizes.

These changes are good news for Premium Bond holders who had seen their prize fund slashed earlier this year.

Saving rates rise

Savings customers with each of the following accounts will also benefit from better interest rates from 1 December 2017:

  • Direct Isa, rising from 0.75% to 1%
  • Direct Saver, rising from 0.7% to 0.95%
  • Income Bonds, rising from 0.75% to 1%
  • Investment Account, rising from 0.45% to 0.7%
  • Junior Isa, rising from 2% to 2.25%

Ian Ackerley, chief executive of NS&I, says: “NS&I is pleased to be able to offer savers increased rates across our variable products. By reflecting the change in the base rate we are continuing to meet the needs of savers, whilst also balancing the interests of taxpayers and the stability of the broader financial services sector.

“For our 25 million customers, including around 21 million Premium Bonds customers, these changes will present a welcome boost. NS&I will be giving out the largest number of Premium Bond prizes every month, an estimated 2.9 million, and all money invested is 100% secure, as NS&I is backed by HM Treasury.”

The table below details the full round-up of Premium Bond prize changes: 

Value of prizes Number of prizes in November 2017 draw Number of prizes in December 2017 (estimate)
£1,000,000 2 2
£100,000 3 4
£50,000 5 9
£25,000 12 18
£10,000 28 42
£5,000 57 87
£1,000 1,366 1,660
£500 4,098 4,980
£100 22,190 22,792
£50 22,190 22,792
£25 2,325,993 2,853,919
Total: 2,375,944 2,906,305

 

Leave a comment

been in 50 years had one

been in 50 years had one minimum win

new

Have you been in at the upper

Have you been in at the upper limit if you don't mind saying? I'm thinking of adding to my holding in light of this interest rate news.

I was concerned about the

I was concerned about the previous reduction in the premium bond prizes.
So much that I was going to move the money into buying more shares.
However now that I have heard of the increase in prizes, I am going to continue being a bond holder.

I received an email from NS&I

I received an email from NS&I when the rate fell in May but none about the increase so thank you Moneywise. I'll put the money I took out in May back in now I think, though I still haven't won anything in the last 12 months, I won't hold them forever at this rate since even 0.01% interest is better than nothing.