Award rate for Premium bond A August is ready to cut, national savings and investment (NS and me) Has confirmed, bringing changes for millions of account holders.
Award fund will shrink 3.6 percent from August draw, below 3.8 percent. It marks the decrease in the third rate of the year, after cutting from 4.15 percent to 4 percent for January.
While winning the chances of winning, the cut means that the estimated number of awards for the tombs Has been launched again.
Premium bond is an investment product introduced by the government -owned NS & I. It offers a unique opportunity to the saves to win a tax-free cash prize of £ 25 to £ 1 million every month.
Unlike traditional savings accounts, Premium bonds do not earn interestInstead, the return comes completely from these prizes. The minimum investment with a maximum holding of £ 50,000 is £ 25.
Now the latest award rate cut means that there will be an estimated 75 awards of £ 100,000 below 79. Meanwhile, the number of £ 50,000 awards will be reduced from 159 to 151.
The number of prizes of £ 25,000 will be 317 to 302, and £ 10,000 will be from 792 to 754. However, the number of £ 1 million awards will remain the same on two.
The number of £ 25 prizes is also prescribed to grow for the August draw, an estimated 2.56 million available, above 2.19 million.
Savings organized in premium bonds do not earn interest with regular bank accounts. This has inspired some experts to question how viable they are for savior to maximize their returns on their money, especially in the light of continuous prize rate cut.
Analysis from Martin Lewis‘S Money savings expert The site says that the latest cut premium bond is “easy to defeat elsewhere”.
It says: “For most savior with average fortune, interest paying accounts will now be even more likely to defeat premium bonds. The reason is that savings interest is a guaranteed return.”
recent Research from octopus money It was also found that the premium bond holders are waiting for 3.5 years on an average to win a singles prize. And in nine of ten of these cases, the award is less than £ 2,000.
This means that for most savior, one regular Savings account The most likely to obtain a guaranteed return is Avenue, the most competitive options are currently offering 4.75 percent interest.
Another option is to open a cash-free ISA, a savings account that allows tax-free deposits of up to £ 20,000 a year. Like a premium bond, a cash ISA can compete as a tax-free option, but also pays a regular and guaranteed interest rate.
Andrew Westhead, NS and I Retail Director, said: “This adjustment to the premium bonds prize fund rate – first in four months – reflects the changing scenario for savings.
“Premium bonds maintain their unique appeal by offering full security supported by HM Treasury, easily withdrawing, and potentially to win tax-free awards every month.
