NS&I has warned customers wanting to change their Premium Bonds arrangement that this may mean they miss out on the monthly prize draw.
A saver contacted the provider over social media platform X to ask: “I want to consolidate my holding into one group of 50,000 consecutive numbers. Do I have to sell all then buy again?”
A person can hold up to £50,000 in Premium Bonds, with each £1 Bond having an equal chance of winning a prize in the monthly prize draw – if they are eligible to be entered.
NS&I responded with a word of caution. A representative said: “If you wish to do this, you would need to cash in your holding, then purchase the Bonds in one lump sum. Please note however, if you do this, you will miss out on a prize draw.”
Prizes in the monthly draw range from as low as £25 up to the two jackpot prizes for £1million.
Bonds go into the monthly draw rather than getting an interest rate as with a conventional savings account.
The prize fund rate is currently 4.4 percent with the odds of winning at 21,000 to one.
Martin Lewis recently warned Premium Bonds customers they may be able to get a better rate of return with a savings account.
He explained: “If you’ve got £50,000 in, with typical luck you’re likely to win just a little bit less than the published interest rate.
“If you’ve got far less in, then you’re likely to win with typical luck – and of course some people have more than typical luck and some people have less than typical luck – quite a bit less than the published rate.
“And the published rate is nowhere near as high as you can get in top easy access or fixed savings.”
The prize fund rate for Premium Bonds is currently 4.4 percent so a person with the maximum £50,000 who takes home winnings in line with this rate as if it were an interest rate, would win £2,200 in a year.
But if a person put this same £50,000 in the current top-paying one-year fixed rate saver, at 5.25 percent, after a year they would have £2,625 in savings, with an extra £425 to their name.
Mr Lewis said Premium Bonds may suit someone who has used up their tax-free allowances on their growth on their savings.
He explained: “So if you’re going to have £50,000 and you’re going to put that into a Premium Bond, and you pay tax on your savings, because you’ve used your cash ISA and your personal savings allowance, then it’s worth looking at.”
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