NS&I increases premium bonds prize fund rate

NS&I has announced that it is increasing the Premium Bonds prize fund rate to 1.5% from the October 2009 prize draw onwards. The odds of winning are also improving from 36,000 to 1 to 24,000 to 1, estimated to create an extra 500,000 Premium Bond prizes to be distributed in the monthly draw - with over 1.7 million tax-free prizes now set to be awarded next month.

The number of prizes a Premium Bond holder with the maximum amount invested (£30,000) could win each year, with average luck, will rise from 10 to 15 with the new odds.

NS&I reviews the interest rates on all of its savings products each month to ensure it continues to balance the interests of its savers, the taxpayer and the stability of the wider financial services market.

Peter Cornish, Director of Customer Offer, NS&I, said: "Premium Bonds are hugely popular with our customers and we know that winning prizes frequently is particularly important to them. These changes mean we can increase the frequency of an envelope from ERNIE dropping on their doormat."