Premium Bonds cuts prize rate again – are they still worth it?
The prize rate for premium bonds will be cut in August, and the National Savings and Investments (NS and I) approved by bringing changes to millions of account holders.
The award fund will decrease from 3.8 percent to 3.6 percent from the draw of August. It points to the decrease of the third ratio of the year after falling from 4.15 percent to 4 percent for January.
Although the probability of winning remains the same, the estimated awards for the slaughter have been reduced again.
Premium bonds are an investment product presented by the NS & I of the state. Saves offer a unique opportunity to win the tax exempts exempt from tax ranging from £ 25 to £ 1 million each month.
Unlike traditional savings accounts, premium bonds do not accrue interest. Instead, returns only come from these prize lottery. Minimum investment with £ 25, with a maximum of £ 50,000.
The last reward rate segment means that there will be about 75 £ 100,000 awards to fall from 79. Meanwhile, the number of £ 50,000 will be reduced from 159 to 151.
The number of £ 25,000 will drop from 317 to 302 and 10,000 £ award from 792 to 754. However, the number of £ 1 million will remain the same.
The number of £ 25 will increase for the lottery of August and 2.19 million estimated 2.56 million.
Savings made in premium bonds do not accrue interest as in normal bank accounts. This has led some experts to question how suitable they are for savings that want to maximize their money in the light of consecutive reward deductions.
Martin Lewis’s Analysis Money saving expert The site says the last section has made premium bonds “even easier to beat elsewhere”.
“Most of the average chances of savings will be higher than that of the accounts paying interest rates will now be more likely to overcome premium bonds. This is because the savings interest rate is a guaranteed return.”
Recent research on octopus money also found that premium bond holders have waited for an average of 3.5 years to win a single prize. And in nine of these cases, this award is less than £ 2,000.
This means that most of them are the most likely way to save a regular savings account, and currently the most competitive options are about 4.75 percent interest.
Another option is to open a Cash ISA with a savings account that provides tax exempts up to £ 20,000 per year. Like premium bonds, a cash Jesus can compete as a tax -free option, but also pays a regular and guaranteed interest rate.
NS & I Retail Director Andrew Weshead said: “This adjustment to the premium bond award fund ratio, which is the first of the four months, reflects the changing landscape for savings.
“Premium bonds continue their unique attraction by offering full security, easily withdrawal flexibility and a tax -free prize, supported by the Treasury of HM.
