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Premium bonds prize fund boosted for the third time this year – what are your chances of winning?
An extra £15m prizes will be up for grabs from NS&I's March prize draw
National Savings and Investments (NS&I) will increase its premium bond prize fund rate from 3.15% to 3.3% from the March prize draw – the highest it's been for nearly 15 years.
The prize fund rate refers to the overall annual growth across the billions of premium bonds, but doesn't necessarily mean you're more likely to win a prize.
NS&I has also upped the rates for its Direct Saver and Income Bonds; both will pay 2.85% AER as of 14 February, which is up from 2.6%.
Here, Which? explains how many more premium bond prizes will be in next month's prize draw and what it means for your chances of winning.
How is the prize fund changing?
This latest prize fund increase marks the fifth time the rate has risen in the past 12 months, and the third time in 2023 alone.
NS&I is expected to give away a total of £329,316,825 in March, up from £314,347,875 in February's prize draw.
However, there will be the same number of prizes available – a total of 4,989,652. This is because there will be more than 243,000 fewer prizes worth £25. And, instead, the number of higher-value prizes will be boosted. There will still only be two jackpot winners who will each receive £1m.
The table below shows how March's premium bonds prizes will change next month:
| Value of prizes | Number of prizes in February 2023 | Number of prizes in March 2023 (estimated) |
|---|---|---|
| £1m | 2 | 2 |
| £100,000 | 59 | 62 |
| £50,000 | 117 | 123 |
| £25,000 | 236 | 248 |
| £10,000 | 590 | 620 |
| £5,000 | 1,177 | 1,236 |
| £1,000 | 12,573 | 13,173 |
Source: NS&I
- Find out more: are premium bonds worth it?
Are the odds of winning any better now?
Despite the boost to the prize fund rate, your chances of winning will remain at 24,000 to 1.
If you do strike it lucky and your premium bonds number gets picked, there's slightly more chance of the prize being worth more than £25, as the number of higher-value prizes are being increased.
The odds of any individual premium bond number being picked are exactly the same. NS&I uses Electronic Random Number Indicator Equipment known as Ernie to generate random numbers, which are then matched against eligible bond numbers to determine the winners.
If you're thinking of investing in premium bonds for the first time, or increasing your holding, bear in mind that they are only eligible for the draw once they've been held for one full calendar month. So if you invest in premium bonds now, your bonds won't be entered into a prize draw until April.
- Find out more: what is National Savings & Investments?
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Listen nowWhy have rates increased?
NS&I provides funding to the UK government, meaning it needs to balance several things when setting rates – the amount of money it needs to raise, while making sure not to adversely affect the rest of the savings market.
Ian Ackerley, NS&I chief executive, said: 'Today’s changes will provide a welcome boost for savers of all ages across the country, with more premium bonds prizes and some of the highest interest rates we’ve seen in more than a decade.
'In a fast-changing savings market, we’re committed to making sure our products remain competitive and our customers get a good return on their savings. Today’s changes ensure that we continue to balance the needs of savers, taxpayers and the broader financial services sector.'
However, there may also be an issue of people withdrawing money from their premium bonds holdings.
According to NS&I figures, February 2023 was the first time in more than five years that there's been a decrease in the number of eligible bonds; in January 2023, there were 119.7bn bonds in the prize draw, by February this had dropped to 119.6bn. It may not seem like a large drop, but during 2020, when other savings providers offered rock-bottom rates, it wasn't unusual for total bond numbers to increase by more than hundred billion each month.
Successive increases to the prize fund could also be a way to encourage savers to return.
