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 per cent to 0.5 per cent, 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 per cent 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 per cent to 1.4 per cent.
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 per cent to 1 per cent
- Direct Saver, rising from 0.7 per cent to 0.95 per cent
- Income Bonds, rising from 0.75 per cent to 1 per cent
- Investment Account, rising from 0.45 per cent to 0.7 per cent
- Junior Isa, rising from 2 per cent to 2.25 per cent
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 per cent secure, as NS&I is backed by HM Treasury.’
This is article was originally written by our sister publication Moneywise.
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