NS&I, which stands for National Savings and Investments, is a popular method of saving which ensures Britons’ money is 100 percent guaranteed by HM Treasury. One of the most used services from the savings provider is Premium Bonds, an investment product where people are entered into a monthly prize draw to win up to £1million each month. While Premium Bonds do not provide Britons with a chance to grow their money, they do have an interest rate which goes towards funding the prizes people can secure each month.
As interest rates more widely take a tumble, primarily due to the Bank of England’s decision to lower its base rate to 0.1 percent, Premium Bonds could present a good opportunity for savers.
Ed Monk, Associate Director at Fidelity International, provided further insight into the options, and why he believes Premium Bonds may work.
He said: “I’m seriously considering sticking the bulk of my cash savings into Premium Bonds.
“I’ve watched the interest paid on my cash savings account fall by more than half in the past year and, after a bit of Google research, am now willing to forgo the little interest it pays for the chance of cash prizes from Premium Bonds.
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He said it is not equivalent to an interest rate, representing only the average return from prizes – which includes those winning the maximum £1million.
Nevertheless, it appears Premium Bonds have become particularly popular recently, with data from MoneySavingExpert showing savers have piled into this account.
The number of Premium Bonds in the March 2021 draw was recorded at 2,160,113,561 more than the previous draw – the biggest monthly increase ever recorded.
With interest rates at shocking lows, it may be the case more people are interested in Premium Bonds – which while not having an interest rate, do provide Britons with the chance to win big.
It is worth noting, though, NS&I is currently changing the way Premium Bonds prizes are paid out to lucky winners, and the decision may mean some Britons need to act.
Premium Bonds prizes can be paid out in a number of ways, but a traditional way of receiving them is through the post – known as a prize cheque or prize warrant.
However, NS&I has confirmed this will be phased out in spring 2021, after delays were announced in December 2020 – and thus many are keeping an eye out this month.
The delay has allowed Britons to have more time to get their affairs in order and ensure the switching process is as smooth as possible.
People who still need to make the switch can provide NS&I with their bank account details to get the ball rolling on the matter.
If already registered for NS&I’s online and phone service, Britons can input their details securely by logging onto their NS&I account.
Those who do not wish to register can use the new NS&I prize options service, which consists of a secure three-step process.
Bank account details can be entered on NS&I’s dedicated ‘prize options’ section on their website and can choose to have prizes paid directly into their bank account or reinvested up to a maximum of £50,000.
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