NS&I Premium Bond Rate Hits 4.35% – Should You Buy?
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More than 22 million Premium Bond holders will see a boost to the prize fund rate to 4.35% up from 3.8% for the September 2026 draw, National Savings & Investments (NS&I) revealed.
The increased prize fund rate will increase the chance of winning a Premium Bond prize to 21,000 to one, up from 22,000 to 1. It’s the second time NS&I boosted the rate this year.
Premium Bonds are a type of savings account issued by the Treasury-backed NS&I.
Compared to the August 2026 Premium Bond prize draw, there will be over 308,000 extra prizes in the September draw.
The prize pot is increasing by around £63m to over £497m, according to NS&I estimates.
Interest rates rise across the board
NS&I is also increasing the rate across all terms for British Savings Bonds just a few weeks after they increased in late July. The new rates kick in from 18 August 2026.
The Guaranteed Growth one-year bond is increasing from 4.72% to 4.82% while the five-year bond is rising from 4.75% to 4.85%.
The table below shows how much each bond is rising:
| Product | Previous interest rate (from 31 July 2026) | New interest rate from 18 August 2026 (on general sale) |
|---|---|---|
| Guaranteed Growth Bonds 1-year (Issue 92) | 4.72% gross/AER | 4.82% gross/AER |
| Guaranteed Growth Bonds 2-year (Issue 80) | 4.70% gross/AER | 4.81% gross/AER |
| Guaranteed Growth Bonds 3-year (Issue 82) | 4.68% gross/AER | 4.83% gross/AER |
| Guaranteed Growth Bonds 5-year (Issue 74) | 4.75% gross/AER | 4.85% gross/AER |
The Guaranteed Growth Bonds are also increasing at the following rates:
| Product | Previous interest rate (from 31 July 2026) | New interest rate from 18 August 2026 (on general sale) |
|---|---|---|
| Guaranteed Income Bonds 1-year (Issue 92) | 4.63% gross/4.72% AER | 4.72% gross/4.82% AER |
| Guaranteed Income Bonds 2-year (Issue 80) | 4.61% gross/4.70% AER | 4.71% gross/4.81% AER |
| Guaranteed Income Bonds 3-year (Issue 82) | 4.59% gross/4.68% AER | 4.73% gross/4.83% AER |
| Guaranteed Income Bonds 5-year (Issue 74) | 4.65% gross/4.75% AER | 4.75% gross/4.85% AER |
Savers with a Direct Saver account and Income Bonds will also see an increase in interest rates to 3.75%, up from 3.45% and 3.5% respectively.
Is now the time to buy Premium Bonds?
Premium Bonds offer tax-free prizes, however, the returns aren’t guaranteed, unlike money held in a traditional savings account or Cash ISA.
Although the Premium Bond prize fund rate has increased to 4.35%, you might not win a prize. There are also higher-paying savings accounts available on the market paying up to 8% AER.
Investing using a Stocks and Shares ISA could offer the potential to earn higher returns than Premium Bonds too, if you don’t need to access your funds for at least 5 years.
The FTSE 100, which is made up of the UK’s largest 100 companies,has provided an average annualised return of 13% over 5 years.
However, investing your capital is at risk, which means you might not get back everything you put in.
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