NS&I has announced this morning that it has increased the interest rate for its Direct ISA to 3.50% gross/AER from today to help savers who are reviewing their ISA plans as the new tax year approaches.
In response to changes in the savings market, NS&I will also be lowering the rates on some of its variable products. A new prize fund rate of 3.80% for Premium Bonds will come into effect for the April 2025 draw, with the odds remaining at 22,000 to 1.
Additionally, from Wednesday 5 March 2025, the interest rate for Direct Saver will change to 3.30% gross/AER; and Income Bonds will change to 3.26% gross/3.30% AER.
Andrew Westhead, NS&I Retail Director, said:
“At a time when many savers are reviewing their ISA plans, I’m glad we have been able to increase our Direct ISA interest rate for those wanting to make the most of their tax-free savings allowance.
“We regularly review our products to ensure they reflect current market conditions. The changes we are making to Premium Bonds, Direct Saver and Income Bonds rates enable us to continue to balance the interests of savers, taxpayers and the stability of the broader financial services sector.
“Even with the change to the Premium Bonds prize fund rate, we are expecting more than 5.9 million tax-free prizes worth over £411 million to be won in the April 2025 draw.”
Direct ISA
From today, 18 February 2025, the interest rate for NS&I’s Direct ISA will increase to 3.50% AER, up from 3.00% AER. Direct ISA is a cash ISA for customers aged 18 or over who are resident in the UK for tax purposes. Customers who have an NS&I Direct Saver can apply online for a Direct ISA and pay for it from their Direct Saver. Money can be taken out of the Direct ISA online or by phone, with no notice or penalty.
| Product | Current interest rate (from 18 August 2023) | Interest rate from 18 February 2025 |
| Direct ISA | 3.00% AER (tax-free) | 3.50% AER (tax-free) |
Premium BondsFrom the April 2025 draw, the prize fund rate for Premium Bonds will change to 3.80%, down from 4.00%. The odds of winning will remain the same at 22,000 to 1.
The April 2025 Premium Bonds draw is expected to have over £411 million in the prize fund with more than 5.9 million prizes, ranging from two £1 million prizes to over 2.1 million £25 prizes.
| Current prize fund rate (from January 2025) | Current odds (from December 2024) | New prize fund rate (from April 2025) | Odds from April 2025 (no change) |
| 4.00% tax-free | 22,000 to 1 | 3.80% tax-free | 22,000 to 1 |
Number and value of Premium Bonds prizes
| Value of prizes | Number and total value of prizes in February 2025 | Number and total value of prizes in April 2025 (estimate) |
| £1,000,000 | 2 | 2 |
| £100,000 | 82 | 78 |
| £50,000 | 164 | 157 |
| £25,000 | 328 | 313 |
| £10,000 | 820 | 781 |
| £5,000 | 1,641 | 1,565 |
| £1,000 | 17,202 | 16,445 |
| £500 | 51,606 | 49,335 |
| £100 | 1,992,297 | 1,830,825 |
| £50 | 1,992,297 | 1,830,825 |
| £25 | 1,807,915 | 2,170,903 |
| Total: | Total 5,864,354 prizes £430,052,425 | Total 5,901,229 prizes £411,118,825 |
Direct Saver and Income Bonds
| Product | Current interest rate (from 20 December 2024) | Interest rate from 5 March 2025 |
| Direct Saver | 3.50% gross/AER | 3.30% gross/AER |
| Income Bonds | 3.44% gross/3.49% AER | 3.26% gross/3.30% AER |
