Are Premium Bonds set to turn into much less enticing?

Premium Bonds are extremely popular, with the prize draw fund currently at 4.4 per cent.

And investors bought and held 540,384,433 more bonds in this month’s draw compared with last month’s – the highest increase in more than a year.

The NS&I rate has held steadfast since March, while other easy-access rates have dropped.

Premium Bonds: Money continues to pour into them – could the underlying rate be cut? 

Several easy-access accounts at that time paid more than 5 per cent. Now the top rate is 4.79 per cent from Oxbury Bank. 

But the popularity and high return of Premium Bonds could suggest that a cut is on the cards.

The Treasury has asked NS&I to raise £9billion in its current financial year – 20 per cent more than last year. 

With a £22billion black hole in public finances, the Government might lean on NS&I even more. 

That could prove good news, as any cuts could be less heavy-handed.

Last week, NS&I ­quietly cut the astounding 5.15 per cent rate it was offering to more than a quarter of a million savers.

The high-paying bond was on sale for just five weeks and was available to the 225,000 savers who snapped up Guaranteed Growth or Income Bonds last summer.

NS&I was offering 5.15 pc to customers who fixed for one year or 5.03 per cent for those who preferred monthly interest.