The chance of winning with Premium Bonds will go up by 50% from October as the prize fund rate increases from 1% to 1.5%.
National Savings and Investments (NS&I) has announced that the increase in the Premium Bonds prize fund rate to 1.5% will improve the chances of winning from 36,000 to 1 to 24,000 to 1, estimated to create an extra 500,000 Premium Bond prizes each month.
The number of prizes a Premium Bond holder with the maximum amount invested (£30,000) could win each year, with average luck, will rise from 10 to 15 with the new odds.
Peter Cornish, Director of Customer Offer at NS&I, said: ‘Premium Bonds are hugely popular with our customers and we know that winning prizes frequently is particularly important to them. These changes mean we can increase the frequency of an envelope from ERNIE dropping on their doormat.”
Premium Bonds not inflation-proof
Martyn Saville, Which? Senior Researcher, commented, ‘The Premium Bond payment rate went down from 1.8% to 1% in March this year, so it’s good news for consumers to see it going back up again. Premium Bonds can be a great way to have a flutter without staking your capital, especially while inflation and savings rates are historically low.
‘However, when inflation starts to creep up again, the relatively low average return on Premium Bonds could mean your savings are gradually eroded by the increasing cost of living. If you’re looking for guaranteed tax-free returns on your savings though, you may decide you’d be better off with a fixed-rate cash Isa, such as the 4.6% currently offered by Leeds Building Society on its 5-year fixed-rate deal.’
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