As the Premium Bond prize rate rises, here’s the one savings prize draw worth entering… and the ones I’d definitely avoid: SYLVIA MORRIS

Last Wednesday, I predicted that National Savings and Investments (NS&I) would improve its performance. Premium Bonds reward rate. One day later it happened.

The new rate, which increases from 3.3 percent to 3.8 percent, applies to the July drawing, where NS&I expects to give away approximately 322,000 more prizes than this month.

The increase took the premium bond rate above the Bank of England base rate for the first time in nearly four years. Your chances of winning will increase from 23,000 to 22,000 for every £1 of bonds you hold.

Premium Bond fans love the excitement of the monthly draw and the tax-free benefits that come with winning. NS&I tempts us with higher rewards. From July there will be 12 extra prizes of £100,000, 24 prizes of £50,000 and 49 prizes of £25,000. The number of £50 and £100 prizes will increase by more than 400,000 each.

The chance to become a millionaire gives NS&I a huge advantage over its competitors.

Banks and building societies cannot sell Premium Bonds; but a few offer monthly prize drawings linked to savings accounts. The rewards are smaller, but you earn guaranteed interest.

The newest of these include Santander with its First Home Saver easy access account.

Whoever saves once a month from now until December will win the £10,000 reward, an increase on your first home deposit. To participate you must load at least £100 into your account every month. Every £100 increase gets you one entry into the draw.

If you make no more than two withdrawals per month, you’ll earn 4 percent of your money.

Kent Reliance is giving away £1,000 every month to one lucky saver who has at least £100 in their account. You are automatically entered into the raffle.

Because it pays competitive rates (4.05 percent on a Limited Access Savings account, for example), it’s an attractive add-on to your account.

The Family BS Windfall Bond requires a high amount of £10,000 to qualify for the prize draw and pays an interest rate of just 2.75 per cent.

But it offers bigger prizes each month, ranging from £100 to £50,000. You can withdraw your money without paying any fee if you notify the association 35 days in advance.

There is a prize of £10,000 in the App Only Chip monthly draw. But given that the Rewards Savings Account does not offer interest, I would avoid it.

Meanwhile, Revolut launched a prize draw last week. Customers set a weekly savings target of between £10 and £50, and those who maintain their ‘saving streak’ within a month are eligible to draw £10,000.

Those who maintain the winning streak for at least 50 of the 52 weeks will stand a chance of winning the £100,000 jackpot. The account pays 3 interest rates.