New interest rates for selected NS&I accounts

• Increased interest rate for NS&I’s Direct ISA with immediate effect
• Premium Bonds prize fund rate will be 3.80% from the April 2025 draw
• Reduced interest rates for Direct Saver and Income Bonds from 5 March 2025

NS&I has increased the interest rate for its Direct ISA to 3.50% gross/AER from today to help savers who are reviewing their ISA plans as the new tax year approaches.

In response to changes in the savings market, NS&I will also be lowering the rates on some of its variable products. A new prize fund rate of 3.80% for Premium Bonds will come into effect for the April 2025 draw, with the odds remaining at 22,000 to 1.

Additionally, from Wednesday 5 March 2025, the interest rate for Direct Saver will change to 3.30% gross/AER; and Income Bonds will change to 3.26% gross/3.30% AER.

Andrew Westhead, NS&I Retail Director, said:
“At a time when many savers are reviewing their ISA plans, I’m glad we have been able to increase our Direct ISA interest rate for those wanting to make the most of their tax-free savings allowance.

“We regularly review our products to ensure they reflect current market conditions. The changes we are making to Premium Bonds, Direct Saver and Income Bonds rates enable us to continue to balance the interests of savers, taxpayers and the stability of the broader financial services sector.

“Even with the change to the Premium Bonds prize fund rate, we are expecting more than 5.9 million tax-free prizes worth over £411 million to be won in the April 2025 draw.”

Direct ISA
From today, 18 February 2025, the interest rate for NS&I’s Direct ISA will increase to 3.50% AER, up from 3.00% AER. Direct ISA is a cash ISA for customers aged 18 or over who are resident in the UK for tax purposes. Customers who have an NS&I Direct Saver can apply online for a Direct ISA and pay for it from their Direct Saver. Money can be taken out of the Direct ISA online or by phone, with no notice or penalty.

Premium Bonds
From the April 2025 draw, the prize fund rate for Premium Bonds will change to 3.80%, down from 4.00%. The odds of winning will remain the same at 22,000 to 1.

The April 2025 Premium Bonds draw is expected to have over £411 million in the prize fund with more than 5.9 million prizes, ranging from two £1 million prizes to over 2.1 million £25 prizes.

Number and value of Premium Bonds prizes

Direct Saver and Income Bonds

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 as NS&I is backed by HM Treasury.
2. 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 shows what the notional annual rate would be if interest was compounded each time it was credited or paid out. Where interest is credited once a year, the rate quoted, and the AER will be the same.
3. Net Financing is the measure of the net change of NS&I funds, meaning total inflows from deposits, retention of maturing monies and capitalised accrued interest, less the total outflows from withdrawals and interest or Premium Bonds prize draw payments. A positive Net Financing figure represents a positive contribution to government financing.
4. The Net Financing target for 2024-25 is £9 billion (+/- £4 billion).
5. Tax-free means the interest is exempt from UK Income Tax and Capital Gains Tax.
6. Information on NS&I’s on sale products can be found here.
7. Information on NS&I’s off sale products can be found here.
8. NS&I photography and logos are available to download here.