Millions of customers across the country will see a boost to their savings as NS&I announces upcoming interest rate increases across its variable products.
This includes the Premium Bonds prize fund rate, which will increase to 4.65 percent, up from four percent – the highest level since March 1999.
Savers holding Income Bonds, Direct Saver, Direct ISA, Junior ISA and Investment Account will also benefit from the rate increases announced today.
The increase to the Premium Bonds prize fund rate will come into effect from the September 2023 prize draw, while customers holding Income Bonds, Direct Saver, Direct ISA, Junior ISA and Investment Account will see their savings boosted from August 18.
Dax Harkins, NS&I chief executive, commented: “These upcoming increases show that we’re supporting savers up and down the country.
“Premium Bonds are one of the nation’s favourite savings products, so increasing the prize fund rate to its best level since 1999 and improving the odds means that more people will have the chance to win prizes each month.
“These rate increases will help ensure that our savings products remain attractive to customers, whilst ensuring that we continue to balance the needs of savers, taxpayers and the broader financial services sector.”
With September 2023 prize fund increase, the odds of winning will improve to 21,000 to one, which represents their “best level” seen since the April 2008 prize draw.
The change in odds will see an estimated extra £66million added to the prize fund, amounting to a potential prize pot of over £470million.
NS&I estimates that there will be 5,785,904 prizes up for grabs from September – an increase of more than 269,000 when compared to August 2023.
NS&I savings rates increase
Interest rates will rise on NS&I’s Income Bonds, Direct Saver, Direct ISA, Junior ISA and Investment Account, on August 18.
The interest rate paid to Direct Saver customers will increase to 3.65 percent from 3.4 percent, while the interest rate paid to Income Bonds will increase to a 3.65 percent Annual Equivalent Rate (AER) from 3.45 percent AER.
The rate paid on NS&I’s Direct ISA will rise to three percent tax-free from 2.4 percent tax-free.
Young savers will also benefit, with the rate that NS&I pays on its Junior ISA increasing to four percent tax-free from 3.65 percent tax-free.
Also effective from August 18, NS&I will be increasing the interest rate that it pays on its Investment Account to one percent, up from 0.85 percent.
