NS&I boosts premium bonds prize fund rate again – but what are the odds of winning?

National Savings and Investments (NS&I) will increase its premium bond prize fund rate from 3% to 3.15% from next month – the highest it's been for nearly 15 years.

This follows a rate increase on 1 January, when the prize fund increased from from 2.2% to 3%. The prize fund rate refers to the overall annual growth across the billions of premium bonds – but doesn't necessarily mean you're more likely to win a prize.

Here, Which? explains how many premium bond prizes you could expect next month, and what it means for your chances of winning.

How is the prize fund changing?

This latest prize fund increase marks the fourth time the rate has risen in the space of a year. The last time it was this high was in May 2008. 

NS&I is expected to give away a total of £314,347,875 in premium bonds prizes in the February prize draw, up from £299,202,350 in January. 

However, the overall amount of prizes has fallen – with an expected 4,986,706 prizes due to be handed out in February, down from 4,989,652 in January. This is due to there being fewer £25 prizes in the February draw – 241,741 fewer, to be precise. Instead, there will be more higher-value prizes, although the number of £1m jackpot prizes will remain at two.

The table below shows how the prize fund will change next month:

_{Source: NS&I}

• Find out more: premium bonds - are they worth it?

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Are the odds of winning any better now?

Despite the boost to the prize fund rate, your chances of winning a prize will remain at 24,000 to 1. 

However, if you're lucky enough to win a prize, there's slightly more chance of it being worth more than £25. From February's draw onwards, there will be an extra three £100,000 prizes up for grabs, six more £50,000 prizes and an increase of 12 prizes worth £25,000. There will also be an extra 31 prizes worth £10,000, another 61 prizes worth £5,000, and 605 more £1,000 prizes. Prizes worth £500 are up by 1,815.

But while the amount of £100 and £50 prizes will rise by just over 121,000 each, the number of £25 prizes will drop by more than 240,000. It means that from February there will be a total 4,936,766 prizes worth £100 or less – that's 413 fewer than in January's draw. 

Remember, your premium bonds are only eligible for the draw once they've been held for one full calendar month. So if you invest in premium bonds now, your bonds won't be entered into a prize draw until March.

• Find out more: what is National Savings & Investments?

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Rates also raised for other NS&I savings

There's also a boost for other savings products from NS&I. The table below shows what's changed:

_{Source: NS&I}

The new rates, which came into effect on 24 January, are an attempt by NS&I to stay competitive as average interest rates for instant-access accounts continue to increase.

The leap to 3.4% AER for NS&I's Junior Isa means the product is now catching up with other similar top-rate deals – although it's still far behind the current best rate of 4.5% for a Bath Building Society Junior Cash Isa.

The 0.3% boost to NS&I's Direct Saver and Income Bonds products is helpful, but several providers are offering top rates close to 3% for restriction-free easy-access accounts. Savers should therefore shop around first to ensure they're getting the best return on their money.

• Find out more: how to find the best savings account