- Savers potentially better off elsewhere despite record Premium Bonds rate
- Other NS&I accounts not as competitive as those elsewhere
- NS&I Junior cash Isa has one of the best rates available
National Savings & Investments (NS&) is increasing the prize fund rate on Premium Bonds from 3 per cent to 3.15 per cent taking it to its highest level in more than 14 years. The increase takes effect from the February 2023 prize draw. It follows an increase in the prize fund rate from 2.2 per cent to 3 per cent at the start of the year and is the fourth increase NS&I has made in the past year.
It means that NS&I Premium Bonds' 'effective interest rate' is among the best available when compared to easy-access savings accounts from other providers. However, NS&I Premium Bonds do not pay interest but rather enter into a draw to win prizes. However, the odds of each £1 bond winning a prize remain fixed at 24,000 to one because NS&I is also increasing the number of prizes worth between £50 and £100,000 from February’s draw. There will be roughly 10 per cent more £50 and £100 prizes, and around 5 per cent more prizes at each level between £500 and £100,000.