When will NS&I increase premium bond prize fund rate?

refluxer

km1500 said:

so the next question is when will they increase other rates eg direct saver currently paying 1.2%

I don't know the interest rate history for their Direct Saver account but the fact I've been a Premium Bond holder (and therefore an NS&I customer) for a long time, yet never held a Direct Saver suggests to me that it's never competed with the best savings accounts elsewhere, as I do tend to move my savings around to get the best rates.

Some of their other products (such as their Income Bonds) have paid decent rates in the past though, IIRC.

S_uk

I'm pleased they've increased the prize rate, although when I saw it's increased from 1.40% to 2.20% I was surprised the odds of any bond winning a prize hasn't changed much, although I can see now they are decreasing the number of £25 prizes significantly, but increasing the bigger prizes.

Does anyone know what % someone with the full holding is likely to get with average luck?

refluxer

S_uk said:

Does anyone know what % someone with the full holding is likely to get with average luck?

It was around 1.3% for the 1.4% prize rate so I would expect it to be somewhere in the region of 2 to 2.1%, unless the shift in prize amount allocation (ie, the move to more £50 or £100 prizes) changes anything ? Possibly not if the top (million-pound) prize rate is similar, as I believe it's this which skews the expected return (with average luck) figure slightly below the advertised prize fund rate.

S_uk

I'd be interested to see the MSE premium bond probability calculator once it's updated.

jak22

The odds of getting something over £25 is still pretty rare so its probably best just to assume - on average over a year - its more like a 2.1% tax free account - that's 3 or 4 £25 prizes a month on average with 50K - up from 2 a month 

eskbanker

jak22 said:

The odds of getting something over £25 is still pretty rare so its probably best just to assume - on average over a year - its more like a 2.1% tax free account - that's 3 or 4 £25 prizes a month on average with 50K - up from 2 a month 

No, 98% of prizes are currently £25 ones, but this changes hugely to only 70% of prizes being the bottom tier under the new model, so it's a significant change - the expected 'average luck' return should be in circa 2% territory, but a £50K holding should deliver about seven prizes above £25 in any given year, compared with less than one currently....

intalex

Is this effective next week’s draw or early November?

refluxer

If it says from October, I would expect the new rate to apply to the October draw.

intalex

Which one is the October draw? The one in early October or early November?

RG2015

intalex said:

Is this effective next week’s draw or early November?

It is being shown as the current rate so that must be from the October draw.