A boost for savers: NS&I increases interest rates

Rate changes to NS&I variable rates products from 1 December 2017
NS&I has today announced that it is increasing interest rates across its variable rate product range, including Premium Bonds, from 1 December.

NS&I will pass on the Bank of England’s interest rate rise to savers, following the decision to increase the base rate from 0.25% to 0.50%.

Interest rates paid on Direct ISADirect SaverIncome BondsInvestment Account and Junior ISA will increase by 25 basis points from 1 December 2017. The prize fund rate on Premium Bonds will also increase by 25 basis points to 1.40% and the odds will improve from 30,000 to 1 to 24,500 to 1. The number of prizes paid out each month will increase from 2.3 million to circa 2.9 million – the highest number of prizes in any monthly Premium Bonds prize draw to date. The changes will come into effect from the December 2017 draw.

Ian Ackerley, Chief Executive, NS&I, said:

“NS&I is pleased to be able to offer savers increased rates across our variable products. By reflecting the change in the base rate we are continuing to meet the needs of savers, whilst also balancing the interests of taxpayers and the stability of the broader financial services sector.

“For our 25 million customers, including around 21 million Premium Bonds customers, these changes will present a welcome boost. NS&I will be giving out the largest number of Premium Bond prizes every month, an estimated 2.9 million, and all money invested is 100% secure, as NS&I is backed by HM Treasury.”

Variable rate savings products

Product Current rate New rate (from 1 December 2017)
Direct ISA 0.75% tax-free/AER 1.00% tax-free/AER
Direct Saver 0.70% gross/AER 0.95% gross/AER
Income Bonds 0.75% gross/AER 1.00% gross/AER
Investment Account 0.45% gross/AER 0.70% gross/AER
Junior ISA 2.00% tax-free/AER 2.25% tax-free/AER

Premium Bonds

Current prize fund rate Current odds New prize fund rate (from December 2017) Odds (from December 2017)
1.15% 30,000 to 1 1.40% 24,500 to 1
  November 2017 December 2017 (estimate)
Total value of prizes £68,308,325 £83,071,775
Total number of prizes 2,375,944 2,906,305
Prize band split:
Higher value (£5,000+)
Medium value (£500-£1,000)
Lower value (£25-£100)
5% of prize fund
5% of prize fund
90% of prize fund
5% of prize fund
5% of prize fund
90% of prize fund
Value of prizes Number of prizes in November 2017 Number of prizes in December 2017 (estimate)
£1,000,000 2 2
£100,000 3 4
£50,000 5 9
£25,000 12 18
£10,000 28 42
£5,000 57 87
£1,000 1,366 1,660
£500 4,098 4,980
£100 22,190 22,792
£50 22,190 22,792
£25 2,325,993 2,853,919
Total 2,375,944 2,906,305

Notes to Editors

  1. NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments to 25 million customers. All products offer 100% capital security, because NS&I is backed by HM Treasury.
  2. Tax-free means that the interest or prizes are exempt from UK Income Tax and Capital Gains Tax
  3. Gross is the taxable rate of interest without the deduction of UK Income Tax.
  4. AER stands for Annual Equivalent Rate and enables the comparison of interest rates from different financial institutions and across different products on a like-for-like basis. It illustrates what the annual rate of interest would be if the interest was compounded each time it was paid. Where interest is paid annually, the quoted rate and the AER are the same.
  5. Information on our products can be found here.
  6. For further information please contact the NS&I media team.