Premium bonds prize fund rate boosted to 4.65% – what are your odds of winning now?
National Savings and Investments (NS&I) is boosting the 'prize fund rate' on premium bonds for the fifth time this year.
It's moving from 4% to 4.65% from September – adding more than £66m to the prize fund. And as the number of prizes will also be boosted, the odds of winning will improve to 21,000 to 1.
NS&I is also increasing interest on its Income Bonds, Direct Saver, Direct ISA, Junior ISA and Investment Account from 18 August.
Here, Which? explains how many more £100,000, £50,000, £25,000, £10,000 and £5,000 premium bond prizes there will be in next month's prize draw and how NS&I's boosted savings rates compare to market-leading deals.
What's happening to the prize fund rate?
The premium bonds prize fund rate, which is the overall annual growth across the billions of premium bonds, is increasing to 4.65% from 4%.
The increase will apply from the September 2023 prize draw, when NS&I is expected to give away a total of £470,827,650 in premium bonds prizes, up from £404,560,900 in August. The number of prizes will also increase from 5,516,739 to 5,785,904 – an increase of more than 269,000.
The table below shows how the prize fund will change next month:
| Value of prizes | Number of prizes in August 2023 | Number of prizes in September 2023 (estimated) |
|---|---|---|
| £1,000,000 | 2 | 2 |
| £100,000 | 77 | 90 |
| £50,000 | 154 | 181 |
| £25,000 | 307 | 360 |
| £10,000 | 769 | 902 |
| £5,000 | 1,538 | 1,803 |
| £1,000 | 16,182 | 18,832 |
Source: NS&I
- Find out more: premium bonds – are they worth it?
What will the odds of winning be from now on?
The chances of winning from September's draw and beyond have increased from 22,000 to 1, to 21,000 to 1 – the best odds since April 2008. That's thanks to NS&I increasing the overall number of prizes up for grabs.
While there will still be only two jackpot winners, the number of prizes worth more than £50 will go up by 942,289. Premium bond holders hoping to win a higher value prize are also in luck with the amount of prizes worth £100,000, £50,000, £25,000, £10,000 and £5,000 going up by 491. There will, however, be 673,124 fewer £25 prizes – the lowest amount you can win.
If you're considering investing in premium bonds now, note that your bonds won't be entered into a prize draw until October 2023; premium bonds are eligible for the draw once they've been held for one full calendar month.
Interest rate boost for other NS&I savings
From 18 August, NS&I is also boosting rates on several of its savings products, which you can see in the table below:
| Product | Current AER | AER from 18 August |
|---|---|---|
| Direct Saver | 3.4% | 3.65% |
| Income Bonds | 3.45% | 3.65% |
| Direct Isa | 2.4% | 3% |
| Junior Isa | 3.65% | 4% |
| Investment Account | 0.85% | 1% |
Source: NS&I
The changes come after the Bank of England raised the base rate for the 14th consecutive time to 5.25% on 3 August.
The interest hikes are NS&I's attempt to stay competitive in the savings market, but they remain a long way off rates offered by other providers. The top rate for an easy-access Isa is 4.4% or 4.7% for a junior Isa, while the top rate for a normal easy-access account is 4.65%, according to Moneyfacts data.
- Find out more: what are the different types of savings account?
