The prize fund rate refers to the overall annual growth across the billions of premium bonds, but doesn't necessarily mean you're more likely to win a prize.
NS&I has also boosted interest on its Junior Isa to 3.65%, benefitting 89,000 young savers.
Here, Which? explains how many more premium bond prizes will be in next month's prize draw and what it means for your chances of winning.
What's happening to the prize fund?
It's the sixth time the prize fund has risen in the past 12 months and the fourth time this year.
It means an additional £39m in prizes will be up for grabs to premium bond holders at the next draw on 2 July, boosting the total value of prizes from £334,047,650 to £374,026,425.
However, the total number of prizes available will drop from 5,061,328 to 5,054,415. That's because there will be 660,033 fewer prizes worth £25 – the lowest amount you can win. Instead, the number of prizes worth £50 to £100,000 will be increased. There will still only be two £1m jackpot winners.
The table below shows how July premium bonds prizes will change next month:
Find out more:What are the odds of winning a prize now?
Sadly, the odds of winning remain unchanged at 24,000 to 1. The good news is, there is now slightly more chance of you winning more than £25, thanks to the boost in the number of prizes worth between £50 and £100,000.
The odds of any individual premium bond number being picked are exactly the same. NS&I uses Electronic Random Number Indicator Equipment, known as Ernie, to generate random numbers that are then matched against eligible bond numbers to determine the winners.
Remember, your premium bonds are only eligible for the draw once they've been held for one full calendar month. So if you invest in premium bonds now, your bonds won't be entered into a prize draw until August.
Find out more:Boost to Junior Isa rate
NS&I has also increased the interest on its Junior Isa account. The rate will go up from 3.4% AER to 3.65%, effective immediately. More than 89,000 savers aged under 18 will benefit from the boost.
However, with savings rates currently soaring, could you get a better deal with another provider?
For an idea of the top rates currently available on restriction-free Junior cash Isas, take a look at the table below:
As you can see, NS&I's rate is lagging behind its competitors. The top rate of 5.1% offered by Bath Building Society is just under one and half percentage points more.
However, accounts from building societies often impose restrictions on who can open the account. For example, Bath, Darlington and Mansfield all require proof that you live, work or study in the local area. Although accounts with Coventry and Beverley are available to all UK residents.
The advantage of an account with NS&I, therefore, is that the eligibility criteria is far less strict and anyone in the UK can set up an account.
source https://www.which.co.uk/news/article/premium-bonds-prize-fund-rate-boosted-to-3.7-what-are-your-odds-of-winning-now-alnK38t1tuhN