NS&I announces rate changes for some variable and fixed term products

• Premium Bonds prize fund rate will be 4.15% and odds of winning 22,000 to 1 for the December draw
• Reduced rates for Direct Saver and Income Bonds from 20 November 2024
• New Issues of 2-year British Savings Bonds on sale today

The prize fund rate for Premium Bonds will change to 4.15% for the December draw, along with odds of winning at 22,000 to 1, NS&I has announced today in response to a changing savings market.  

Additionally, from Wednesday 20 November the interest rate for Direct Saver will change to 3.75% gross/AER, and Income Bonds to 3.69% gross/3.75% AER.

A new 2-year Issue of British Savings Bonds has also gone on sale today offering 4.10% gross/AER for the Guaranteed Growth Bond option and 4.02% gross/4.09% AER for the Guaranteed Income option.

Andrew Westhead, NS&I Retail Director, said:

“As the savings market continues to change, we need to lower the rates on some of our products to help us meet our Net Financing target, while also ensuring we continue to balance the interests of our savers, taxpayers and the broader financial services sector.

“Even with the changes, we’re still expecting to pay out over 5.7 million prizes worth over £435 million in the December Premium Bonds draw.

“Our portfolio of both fixed and variable rate products, plus the unique position of Premium Bonds, continues to give savers the choices they need to help reach their savings goals, backed by the safety and security of our 100% HM Treasury guarantee.”

Premium Bonds

From the December 2024 draw, the prize fund rate for Premium Bonds will change to 4.15%, down from 4.40%. The odds of winning will reduce to 22,000 to 1 from the current odds of 21,000 to 1. The prize fund rate for Premium Bonds was last changed in March 2024.

The December Premium Bonds draw is expected to have over £435 million in the prize fund with over 5.7 million prizes ranging from two £1 million prizes to over 1.5 million £25 prizes.

Value of Premium Bonds prizes

Variable rate savings products

This is the first time that NS&I has reduced interest rates for Direct Saver and Income Bonds since November 2020.

British Savings Bonds

New Issues of 2-year British Savings Bonds went on sale today with a lower rate of 4.10% gross/AER for the Guaranteed Growth option and 4.02% gross/4.09% AER for the Guaranteed Income option. The 2-year Issues of the Bonds were brought back on sale in August this year to offer savers increased choice and longer-term security in a changing market.

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 back 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.