You may want to check your Premium Bonds prizes (Image: Getty)
Premium Bonds customers may want to check how their accounts are set up, or they could miss out on some prizes they are due. Now is a good time to familiarise yourself with the NS&I rules for the savings scheme, as they have changed recently.
Premium Bonds remain a popular choice for savers, with the chance to win a big prize each month, up to £1million. Each £1 Bond you hold goes into a monthly prize draw with the same chance of being paired with a prize.
The chances of a win are quite small at 23,000 to one for each £1 Bond, and most of the prizes are for small amounts such as £25 or £50. But you could also win a prize for a large amount, such as £50,000, £100,000 or even one of the two £1million jackpots.
If you won something in the latest draw, which takes place at the start of each month, but it hasn’t arrived yet, you may want to check your account.
Finance expert Rachel Springall, from comparison site Moneyfactscompare.co.uk, said: “When you open a Premium Bond with NS&I, you can specify how you want any payments made, usually by bank account, so any prize should be paid around the seventh working day of the month.
Read more: DWP ‘incorrect rejections’ alert as new eligibility checks come into force
Read more: Nationwide update for anyone with a current or savings account
“If the funds have not cleared, it’s wise to call NS&I to confirm the payment details. However, if you get your payments by cheque, be sure to cash them in as they expire after three months for security reasons, these can be replaced, so again, just give them a call to get a new one issued.”
Changes to Premium Bonds
NS&I changed the rules from the April prize draw, so that the odds of winning fell from 22,000 to one to 23,000 to one. The prize fund rate was also reduced, down from 3.6 percent to 3.3 percent.
Asked if there could be further changes over the months ahead, Ms Springall said: “The NS&I prize fund usually gets tweaked to follow the path of interest rates.
“It’s a bit hard to tell with the prolonged unrest in the Middle East and its impact on future rate setting and inflationary pressures. In the past, the prize fund has been dropped when interest rates have reduced, it’s also been increased several times when rates have moved in an upwards trajectory.”
Is now the time to cash in your Premium Bonds?
With the dwindling chances of winning a prize, Bond holders may be looking elsewhere to build up their savings. The savings expert said to think about your savings goal when deciding how to structure your savings.
Ms Springall said: “If you want to gradually build up the savings habit, then consider a regular savings account, where a top deal can pay 7 per cent. If you want an emergency fund, it’s wise to open an easy access account, ideally one that pays over 4 per cent, and consider an ISA equivalent to protect your hard-earned cash from tax.
“Fixed rate bonds or ISAs are ideal for those who have a lump sum and want a guaranteed return to watch it grow, aim for a rate over 4.50 per cent. One account that does tend to get overlooked as an in-between is a notice account or ISA, the best pay rates above 4 per cent but require savers to give notice to access their cash, great for careful planning.”
She also said there is good news with more savings provider entering the market, so these are worth a look. Ms Springall said: “The rise of challenger banks is a brilliant uplift for the savings account market, but some options can pose certain eligibility criteria or pose withdrawal restrictions. This makes it essential to check any terms and conditions carefully upon outset to not be left disappointed.”