National Savings & Investments (NS&I) are to raise the their prize payout figure from 1% to 1.5% in October, to attract more savers to its Premium Bond product. The increase will mean an increase in the prize fund from £33.8million to £52.5million.
The prize rate is normally kept in line with the Bank of England interest rate and was cut from 1.8% to 1% in March this year.
In 2007 with the collapse of Northern Rock and other financial institutions NS&I prospered as money flooded in with customers looking for a safe haven for their savings. In the financial year 2008/9 NS&I easily exceeded their fund raising target, but since announcing the cut in the prize fund this year the trend has reversed.
Savers are now looking to earn the best interest possible and are switching their cash to bond’s and the like with bank’s and although the interest rate is still pretty abysmal, the schemes do offer some interest payout, rather than clients relying on winning premium bond numbers with NS&I.
You save your money – you take your choice.
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