More than 570,000 customers holding Direct Saver and Income Bonds will also benefit as the interest rate on both products increases from 1.8 to 2.3 per cent.
NS&I has also increased the interest rate that it pays on its Investment Account from 0.4 per cent to 0.6 per cent. Ian Ackerley, NS&I chief executive, said: “The change to the Premium Bonds prize funds rate, as well as the changes to Direct Saver, Income Bonds and Investment Account, will mean that our products are priced appropriately when compared to the rest of the savings market.
However, experts warn savers they need to be careful before putting all their money into a Premium Bonds account.
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