New Year Premium Bonds boost as NS&I increases rates across several products

Premium Bonds customers are set to get a welcome New Year boost with an extra £80 million in prizes up for grabs from the January prize draw, with an increase to the prize fund rate from 2.20% to 3.00%.

Alongside this, effective from today, NS&I has also increased interest rates across several of its other variable products.

The change to the Premium Bonds prize fund rate is the third upwards change that NS&I has made this year, with the prize fund rate tripling from the 1.00% it was at in May 2022. The changes will see the January 2023 prize fund hit an expected £299,572,750.

The odds will stay fixed at 24,000 to 1, with the changes meaning that customers will have more opportunities each month to win high value prizes, with more than three times as many prizes worth £100,000, £50,000, £25,000, £10,000 and £5,000 available.

More than 570,000 customers holding Direct Saver and Income Bonds will benefit from today as the interest rate on both products increases from 1.80% to 2.30%. The rate on Direct Saver is now at its highest level since the account was launched in March 2010, whilst the interest rate on Income Bonds is the highest it has been since February 2009.

NS&I has also increased the interest rate that it pays on its Investment Account from 0.40% to 0.60%.

The changes will ensure that NS&I’s products are priced appropriately when compared to the rest of the savings market. They also ensure that NS&I continues to balance the interests of savers, taxpayers and the broader financial services sector.

NS&I Chief Executive, Ian Ackerley, said : “The New Year increase to the Premium Bonds prize fund rate will mean that customers will have seen the prize fund rate triple in less than a year. This means a bigger prize pot and more higher value prizes for our customers – a great way to start 2023.

“The change to the Premium Bonds prize funds rate, as well as the changes to Direct Saver, Income Bonds and Investment Account, will mean that our products are priced appropriately when compared to the rest of the savings market. This will also ensure that we continue to balance the interests of savers, taxpayers and the broader financial services sector.”

Current and new Premium Bonds prize fund rate and odds

Number and value of Premium Bonds prizes

Variable rate savings products

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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. NS&I announced on 27 September 2022 that the Premium Bonds prize fund rate would increase from 1.40% to 2.20%, with the odds changing from 24,500 to 1 to 24,000 to 1. The changes were effective from the October 2022 prize draw and more information can be found here .

3. NS&I announced changes to its variable and fixed rate products (including Direct Saver, Income Bonds and Investment Account) on 25 October 2022. More information on this change can be found here .

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 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.

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. For further information please contact the NS&I media team.

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