NS&I is offering increased interest rates across savings products

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Martin Lewis discusses Premium Bonds

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NS&I will increase the prize fund rate from 2.2 percent to three percent, marking the third change this year. In May 2022, the rate was just one percent.

As a result, an extra £80million in prize money will be up for grabs for Premium Bonds savers this coming January.

The odds will stay fixed at 24,000 to 1, but customers will have more opportunities each month to win high-value prizes. There will now be more than three times as many prizes worth £100,000, £50,000, £25,000, £10,000 and £5,000 available.

The odds of winning money from Premium will stay fixed at 24,000 to one but NS&I’s decision will result in customers having a better chance every month to win high value prizes.

Two Britons will still have the chance to win the £1 million jackpots at the beginning of each month.

Ian Ackerley, NS&I chief executive, said the New Year increase means the prize fund rate will have tripled in less than a year.

He added: “The change to the Premium Bond prize fund rate will mean our products are priced appropriately when compared to the rest of the savings market.”

On top of this, NS&I also announced a wave of interest rate rises across its wide range of savings products.

Around 570,000 customers holding Income Bonds and Direct Saver products will see their interest rates increase from 1.8 percent to 2.3 percent, levels last seen in 2009 and 2010.

With this move, NS&I’s Direct Saver rate is at its highest it’s ever been since the savings account was launched in March 2010.

In comparison, the interest rate on Income Bonds is now the highest it has been since February 2009.

NS&I customers with Guaranteed Growth Bonds have also benefitted from increased rates since December 1.

Depending on the fixed term, Growth Bonds holders can now get up to 3.80 percent.

People interested in Fixed Interest Savings Certificates can get up to 3.55 percent depending on the term too.

According to the Government-backed savings provider, these rate changes are meant to ensure the institution’s products are priced appropriately compared to the rest of the market.

Sarah Coles, a senior personal finance analyst, Hargreaves Lansdown, added: “From January the Premium Bond prize fund will be brimming over with hundreds of extra glittering prizes.

“It’s bound to catch our eye at a time when money is tight and everything else in life is looking decidedly drab.

“It could end up being the Christmas present to end all Christmas presents. However, if you’re drawn by the lustre of the new prizes, you need to be clear about the price you’re paying.

“Premium bonds are the jewel in the crown of NS&I, and they’ll shine even brighter from January.

“The prize rate has been upped to three percent, but instead of adding more lower level prizes, NS&I has gone to town with more life-changing sums.

“The number of £100,000 prizes will rise from 18 to 56, the number of £50,000 prizes from 36 to 112, the number of £25,000 prizes from 71 to 223, the number of £10,000 prizes from 178 to 559, and the number of £5,000 prizes from 359 to 1,118.”

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