MILLIONS of savers are set to see a huge boost within weeks.
NS&I is making a big change to Premium Bonds in September and it'll boost your chances of winning.
The Premium Bonds prize fund rate will reach a 24-year high from the September prize draw, increasing to 4.65% from 4% – its highest level since March 1999
This means there will be a whopping £66 million more prizes up for grabs for bondholders.
The odds of each £1 Premium Bond winning a prize will improve to 21,000 to one from 22,000 to one.
It means that there will be an extra 269,000 prizes up for grabs.
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However, although your chances of winning have increased, there's no guarantee that you'll get anything as it's a prize draw.
That said, people will still have a higher chance of winning prizes worth between £50 and £100,000 each month.
Among the changes, savings giant NS&I estimates there will be 90 £100,000 prizes in September, up from 71 in August.
An estimated 181 £50,000 prizes will be available, up from 154 in August.
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And around 360 £25,000 prizes are expected to be on offer, up from 307 in August.
But the estimated number of £1 million prizes will remain the same, at two.
Dax Harkins, NS&I chief executive said: "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."
We've explained everything you need to know about Premium Bonds below.
What are Premium Bonds?
Premium Bonds are a type of savings account that don't offer interest payments like conventional accounts.
Instead, you're given the chance to win a prize worth up to a whopping £1million.
Premium Bonds can be bought from the government-backed National Savings and Investments (NS&I) which also offers a variety of other savings products too.
More than 22million people buy into Premium Bonds.
You can put money in and take it out whenever you want.
You need to put in a minimum of £25 to get started and you can invest up to £50,000.
Each £1 you put in Premium Bonds is an entry into the monthly prize draw.
Because Premium Bonds are government-backed, your money is safe and there's no risk of losing your cash.
What are the Premium Bond prizes?
The draw is held each month and the winning number is picked by a computer called ERNIE (which stands for electronic random indicator equipment).
There are three kinds of prizes:
- Higher value prizes of £5,000, £10,000, £25,000, £50,000, £100,000 and £1million
- Medium value prizes of £500 and £1,000
- Lower value prizes of £25, £50 and £100
How likely am I to be a winner?
The chance of winning a prize with an individual bond right now is 24,000 to one.
Each bond has an equal chance of winning and the more you buy, the more your chances improve.
Most Premium Bond savers will find that their investments fail to keep pace with inflation, but it's hard to find savings accounts that beat inflation too.
You can check your odds depending on how many bonds you have and how long you'll keep them using MoneySavingExpert.com's helpful calculator.
This makes it easier to see if Premium Bonds are right for you, or if you'd be better off with another savings account.
It's also worth noting that Premium Bond winnings are tax-free.
Anyone who has used up their annual ISA limit or personal savings allowance could benefit by saving into Premium Bonds.
How do I check if I have won?
You can use the NS&I Premium Bond prize checker online to see if your numbers have come up.
You'll need to know the numbers of your Premium Bonds which can be found on your Bond record or through your online account.
If you've lost track of your numbers you can ask NS&I for them.
There's also an official app for iPhones and for Androids for checking prizes too, and even an App for Amazon Echo which means you can just ask Alexa.
For this you will need to use your NS&I number rather than each Premium Bond number.
It's 11 digits long and will be on any communication you've had with NS&I.
You don't always need to check your numbers as you can get prizes under £5,000 paid straight into your bank account, or automatically buying more Premium Bonds.
For higher value prizes worth more than £5,000 NS&I will contact you by post and if you scoop the £1million jackpot, someone will pay you a visit to let you know!
NS&I will no longer send out prize cheques in the post.
How do premium bonds compare?
Before you sign up, it's important to check how it compares to the rest of the market to make sure you get a good deal.
We used MoneyFactsCompare to weigh up NS&I's rate for its Direct Saver account to other easy-access accounts on the market today.
Tandem Bank's instant access saver is currently offering 5% interest.
But savers could also get a higher rate by locking their cash away in GB Bank's one-year fixed bond savings account which pays savers 6.05% back on deposits between £1 and £100,000.
The only downside to fixed bond accounts is that you're forced to lock away your cash for a defined period of time.
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So it's also worth weighing up to see what's best for you.
We've previously explained how to find the best savings accounts to suit your needs.
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