This month (July 2023), NS&I (National Savings & Investments) declared that the Premium Bond prize rate will reach its highest level since 2007, providing a convincing savings account option.
Some of the key headlines from NS&I were:
So, a compelling offer – but one that has been pushed to the bottom of the pile in our experience. Talking to clients, plus friends and family, it seems that Premium Bonds were popular in the 80s and 90s, a favoured choice for saving hard-earned cash and even bought as a ‘gift’ for loved ones. But (and this is in our experience, not a generalisation), ask many under 25-year-olds and they struggle to tell you what they are.
Premium Bonds offer a potentially lucrative solution to saving what we refer to as ‘emergency reserves’. They’re tax-free, can be withdrawn at any point without fees (unlike fixed rate ISAs, for example), at present, offer an interest rate not to be sniffed at, plus there is the opportunity to win sizeable figures via their monthly prize draw.
A great option for that rainy day fund, easily accessed in case the boiler breaks down or you have car troubles – that sort of thing. On the brighter side, a good place to save over a couple of years for that big holiday or renovation project.
That said, we’d recommend investing any money you aren’t likely to need over the short term in global stocks and shares. Often, they offer a better potential return over the long term and give you the best chance of beating inflation. That’s because, even with a 4.00% average prize on Premium Bonds, you’re still behind the current inflation rate.
If you’re looking for ways to make the most of your money, get in touch. It’s wise to get an impartial second opinion, before moving savings around – you can arrange a call with us here. It’s free of charge, nothing formal, and we’ll point you in the right direction to save smarter.
This content is for information purposes and should not be treated as financial advice. We would always recommend speaking to a professional before making decisions regarding your wealth..
The value of investments can fall as well as rise and you may not get back the amount originally invested. Past performance is not a guarantee of future results. Values change frequently and past performance may not be repeated. Even a long-term investment approach cannot guarantee a profit.