Premium Bonds Boost: NS&I Raises Prize Fund Rate Ahead of July Draw
Millions of savers are set to benefit after National Savings and Investments (NS&I) confirmed an increase to the Premium Bonds prize fund rate, which will rise to 3.80% from July’s draw.
How Premium Bonds Work
Unlike traditional savings accounts, Premium Bonds do not earn interest over time. Instead, savers are entered into a monthly prize draw where winnings are tax-free. The prize fund rate acts as the closest equivalent to an interest rate and reflects the total value of prizes paid out.
The upcoming increase follows a recent reduction from 3.6% to 3.3% in the previous draw, marking a significant boost for bondholders.
Improved Odds and More Prizes
NS&I also confirmed that the odds of winning will improve to 22,000 to one, up from 23,000 to one. As a result, the July draw is expected to include around 322,000 extra prizes, with the total prize pot rising to more than £60 million.
Each month, two winners receive the £1 million jackpot, but most prize winners receive smaller amounts. In July’s draw, savers can expect:
- 12 additional £100,000 prizes
- 24 more £50,000 prizes
- 49 extra £25,000 prizes
Why NS&I Made the Change
Andrew Westhead explained that the changes are part of regular product reviews to keep rates aligned with current market conditions. He highlighted that Premium Bonds provide the excitement of monthly prizes combined with 100% security backed by HM Treasury, along with the flexibility to withdraw funds at any time. Westhead said the improved rate and better odds mean more chances to win for the UK’s 22 million Premium Bonds holders.
How the New Rate Compares to the Market
Rachel Springall from Moneyfactscompare.co.uk noted that many savers will welcome the increase, especially those who prefer the security of government-backed savings.
However, she pointed out that:
- Some easy-access savings accounts currently offer over 4% interest
- Top fixed-rate accounts can pay well above 4.5%
Despite this, many savers still choose Premium Bonds for their security and the chance to win large tax-free prizes.
A Good Time to Review Savings
The rate change comes as expectations grow that interest rates may remain higher for longer. Experts say this makes it an ideal time for savers to review their existing accounts and compare the latest deals to ensure they are getting the best value for their money.
For Premium Bonds holders, the July draw promises better odds, more prizes, and a larger overall prize fund, offering fresh excitement for millions of savers across the UK.
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