The Premium Bonds prize fund rate is set to rise from 3.3 per cent to 3.8 per cent starting from the July draw, with the odds of winning for each £1 Bond improving from 23,000-to-1 to 22,000-to-1. NS&I has also increased rates across its fixed-term British Savings Bonds and the Green Savings Bond.
Expert Weighs In on Future Rate Increases
George Sweeney, investing expert at comparison site Finder, noted that while further increases to the prize fund rate are possible, they are not guaranteed. "We could see some future changes to the underlying prize rate for Premium Bonds, which are already due to rise from 3.3 per cent to 3.8 per cent for the July draw and beyond," he said. "The Bank of England base rate decisions will have some influence; however, it's not an exact science."
Sweeney explained that NS&I operates differently from other savings institutions because its primary goal is to raise funds for the Government, not to compete for profit. The organisation has a net financing target of £15 billion for the 2026/2027 tax year, which shapes its rate-setting decisions.
NS&I's Unique Position
NS&I is a state-run institution that raises funds for the Treasury. Its net financing target currently stands at £15 billion for the 2026/2027 tax year. Notably, Green Savings Bonds are not subject to this target. These bonds were launched in 2021 to finance green Government projects across the UK.
Considering what might influence future Premium Bonds rates, Sweeney said: "If the Bank of England interest rate landscape looks like we'll stay higher for longer, it's more likely we'll see more enticing Premium Bond prize fund rates later in the year. But it all depends on how the current strategy progresses, because if NS&I raises funds at a faster rate than expected, lifting the prize fund rates for Premium Bonds would actually hinder rather than help it achieve its mandate of raising money, but not too much."
Full List of New Interest Rates
NS&I announced the latest rate increases on June 23. These include:
- Guaranteed Growth Bonds 1-year: 4.69 per cent (up from 4.5 per cent)
- Guaranteed Income Bonds 1-year: 4.69 per cent (up from 4.5 per cent)
- Guaranteed Growth Bonds 2-year: 4.67 per cent (up from 4.48 per cent)
- Guaranteed Income Bonds 2-year: 4.67 per cent (up from 4.48 per cent)
- Guaranteed Growth Bonds 3-year: 4.65 per cent (up from 4.45 per cent)
- Guaranteed Income Bonds 3-year: 4.69 per cent (up from 4.45 per cent)
- Guaranteed Growth Bonds 5-year: 4.55 per cent (up from 4.40 per cent)
- Guaranteed Income Bonds 5-year: 4.55 per cent (up from 4.40 per cent)
- Green Savings Bonds 3-year: 4.45 per cent (up from 3.82 per cent)
