NS&I raises rates and boosts Premium Bonds odds
- NS&I is raising rates on its variable rate products - including Premium Bonds - from 1 December 2017.
- The 0.25% rise will impact interest rates paid on the Direct ISA (rising from 0.75% to 1%), Direct Saver (from 0.7% to 0.95%), Income Bonds (0.75% to 1%), Investment Account (0.45% to 0.7%) and Junior ISA (2% to 2.25%).
- 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 full announcement is available here
This increase in rates reflects many of the announcements we’ve seen from the likes of Nationwide, Santander, Skipton, Coventry, Yorkshire, Norwich and Peterborough, TSB and Chelsea Building Society - all of which are increasing rates on at least some of their accounts in the aftermath of the Bank of England raising the base rate from 0.25% to 0.5%.
Sarah Coles, Personal Finance Analyst, Hargreaves Lansdown:
"Savers will be pleased so see so many providers are passing on the rate rise in full, for at least some of their accounts, and NS&I savers will be delighted to see it join the fray."
"The really exciting news for many people is that Premium Bonds are going to get more generous. The prize fund rate will hit 1.4% - so if you are averagely lucky you will beat the best easy access savings accounts on the market. Of course, people don’t hold Premium Bonds on the off-chance that they’ll be averagely lucky, so the good news is that there will be more of the bigger prizes too."
"Even after all of these announcements, savers should still check the rate they are receiving against the most competitive in the market. Even if your rate has risen, you may be able to beat it by shopping around. Over the past few days we have seen the release of some highly competitive fixed rate deals – and the rates available on the most competitive one year bonds are edging ever-closer to 2%."
|Value of prizes||Number of prizes in November 2017||Estimated number of prizes in December 2017|