More than 22 million individuals holding Premium Bonds are set to benefit from an increase in the prize fund rate for the upcoming July draw. National Savings & Investments (NS&I) has announced that the rate will rise to 3.80%, up from the previous rate of 3.6% in the last draw.
Simultaneously, the odds of winning a prize on Premium Bonds will improve, shifting from 23,000 to one to 22,000 to one. NS&I estimates an additional 322,000 prizes for the July draw, with the total prize pot increasing by over £60 million. This includes 12 extra £100,000 prizes, 24 more £50,000 prizes, and 49 additional £25,000 prizes.
In lower prize tiers, there are expected to be 2.8 million £25 prizes, half a million more than in the current draw, and the estimated number of £50 and £100 prizes is anticipated to increase by around 200,000 to over 1.9 million.
NS&I has also announced an increase in interest rates on several savings products, with the Direct Saver rate going up 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%.
Andrew Westhead, NS&I’s retail director, stated, “We regularly review our products to align with market conditions and are pleased to enhance rates across five variable savings accounts today. Premium Bonds offer tax-free prizes with 100% security, and I’m delighted that we can enhance both the prize fund rate and odds starting July for our 22 million Premium Bonds holders.”
While the allure of winning prizes drives many to hold Premium Bonds, it’s important to note that the prize fund rate, which is not guaranteed, is lower compared to top savings products. According to industry experts Moneyfacts, the average one-year fixed savings rate stands at 4.16%.