NS&I boosts Premium Bond prize pot by over £60 million

From the July prize draw, Premium Bond holders will have even more opportunities to win.

For the first time in over two and a half years, the Government-backed National Savings & Investments (NS&I) is increasing the prize fund rate on its Premium Bonds.

The Premium Bond prize fund rate will rise from its current level of 3.30% to 3.80% in July, which means NS&I will pay out £38 for every £1,000 worth of Premium Bonds purchased (up from £33).

Furthermore, Bond holders will have more chances of securing a prize as NS&I is also cutting the odds of winning from 23,000 to one to 22,000 to one.

“The Premium Bond prize rate increasing is a positive signal, and these products are a great option for savers who want the chance to win big, or to even open them as a gift,” Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, commented.

“It’s worth pointing out that the prize fund rate is now back to where it was last year, as it was 3.80% in April 2025. It rises and falls to adjust to the net financing targets and, of course, considers wider interest rate moves,” she explained.

As a result of these changes, the total monthly Premium Bond prize pot is estimated to be worth £436,833,475 in July, up from May’s sum of £376,180,825, with the number of prizes available each month rising from just over 5.9 million to more than 6.2 million.

Within this number, the July prize draw will see 12 more £100,000 prizes on offer, as well as 24 more £50,000 prizes and 49 extra £25,000 prizes.

Chance of winning big vs. guaranteed returns

With 322,000 extra prizes available each month and with shorter odds of winning, Premium Bonds could seem an even more appealing option for savers.

However, it’s important to note that there is still no guarantee of winning. While some savers could win big with their Premium Bonds and get a much higher return on their money than if they had put the same sum in a savings account, some unlucky savers may not win anything at all.

The prize fund rate for Premium Bonds isn’t an interest rate and, in reality, many savers may find they receive a much lower return on their money than the advertised figure.

Springall warns that “winning is all about luck” and, because Premium Bonds don’t pay interest, savers may see their “deposit erode in real terms due to inflation”.

Nevertheless, she notes that “the fact that savers can open one with just £25 means that Premium Bonds are very accessible and can sit alongside other dedicated savings accounts or investments”.

Read more: Premium bonds vs. savings accounts

NS&I increases savings rates

As well as improving its Premium Bond returns, NS&I has also raised rates on a selection of its savings accounts and ISAs. This will be welcome news to savers who prefer to keep their money with NS&I but want to ensure they get a return on their savings pot, instead of leaving it up to chance.

If savers want to make the most of their annual ISA allowance, NS&I’s Direct ISA offers an even higher rate of 3.80% AER. Or, for those who want to build up a tax-free savings pot for their child, its Junior ISA now pays 3.70% AER.

“This move from NS&I comes at a time when there are expectations for interest rates to stay higher for longer, so it is important that it remains in a somewhat middle ground space to offer a fair rate, but not lead the market outright,” Springall explained.

Despite these increases, she points out that there are still higher rates available elsewhere, with several easy access accounts offering in excess of 4.10% AER and the leading fixed bonds paying above 4.50% AER.

Nevertheless, some savers may be willing to miss out on these higher rates in return for the protection NS&I offers, as all money deposited with the brand is 100% backed by HM Treasury.