Premium bond savers are set to receive large payouts after National Savings & Investments (NS&I) raised its price to 3.15% from its drawdown next week.
This is the fourth increase in the price of the Premium Bond fund since interest rates started to rise just over a year ago.
The latest increase means an additional £15m paid out in prize money compared to last month, bringing the total to £314.3m.
The odds of each £1 bond winning a prize will remain at 24,000 to 1.
National Savings & Investments (NS&I) has raised its price to 3.15% from its draw next week
The changes mean the number of prizes worth £50 to £100,000 will increase from next month’s draw on February 2.
Some 870,000 savers will also get a boost to its Direct Saver, Direct Isa and Income Bonds.
Premium bonds: how do they work?
Premium Bonds customers buy bonds at £1 each, but must now buy at least £25 in one go.
Each month, each bond is entered into a lottery.
Each link can win multiple times – or never.
Customers can cash in their bonds whenever they want, but may have to wait a few days to get the money.
All prices are exclusive of tax.
Around 80,000 under 18s will benefit from an increase in their Junior Isa rate.
The rate of NS&I’s second most popular account, Direct Saver, has been reduced from 2.3% to 2.6%.
This is the highest rate paid since the account was launched in March 2010.
This puts the easy-to-access account just behind the top payers on internet accounts and a top rate if you want to manage the account over the phone.
Income bonds, popular with retirees because interest is paid monthly, also rose to 2.6%.
This is the highest rate since 2008. Just a year ago it was paying just 0.35pc and a low of just 0.01pc for the 12 months to November 2021.
His Direct Isa goes from 1.75 pc to 2.15 pc, while his Junior Isa goes from 2.7 pc to 3.4 pc. This is the bank’s latest initiative backed by the government to meet its funding targets.
State-owned savings bank NS&I plans to provide £6bn, plus or minus £3bn, in its financial year to the end of March.
By mid-term at the end of September, it had reached a total of £3.4billion.
Latest figures from the Bank of England show it saw £281m leave in November, the first time it has seen an outflow since September 2021 and the biggest since March of the same year.
Ian Ackerley, chief executive of NS&I, said: “The changes will give savers a welcome boost with more premium bond prices and some of the highest interest rates in over a decade.”
The amount of premium bonds stands at nearly £200bn as punters hope for a big payout.
The February draw features 4,989,652 prizes ranging from £25 to £1million up for grabs.
This is an increase of 2,949 prizes from last month’s draw, which had 4,986,706 cash prizes.
This is equivalent to £15,145,525 extra cash available in next month’s draw.
There will be fewer £25 cash prizes, as part of NS&I’s strategy of cutting smaller prizes while increasing larger ones.
This time, the number of £25 prizes drops by 241,741 to 2.37 million from 2.6 million in this month’s draw. The number dropped by 3.5 million in the December draw.
The biggest increase for next month is in the £50 and £100 prizes, both up from 121,077 to 1.28 million each.
The number of £500 prizes will increase to 37,719 as he pays out another 605 prizes of £1,000, making a total of 12,573.
The number of £5,000 prizes will increase by 61 to 1,177 while there will be 31 additional £10,000 payouts, up to 590.
The £25,000 prize pool total increases by 12 to 236, while there will be 117 £50,000 winners, up from 111.
The £100,000 prize increases by three to 59 while the £1 million jackpot remains the same at two each month.
The £1million prize remains the same – with two people eligible to win the highest cash amount.
Prices rise from January to February premium bond draw
January no. prices
February no. prices