BIG SPENDER

What are Premium Bonds and how do they work?

PREMIUM Bonds are a unique and popular way to save some cash - but how do they work?

Premium Bonds are a type of savings account backed by the Government.

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Premium Bonds can be bought from National Saving and Investments which offers a variety of savings productsCredit: PA:Press Association

But instead of getting a fixed rate of interest like you would from a high street bank, your money is entered into a prize draw each month.

It has now been announced that the prize fund rate for Premium Bonds increased to 3.3% in March.

This means customers with savings in NS&I's variable rate accounts have seen a boost in their savings in the last month.

The rate has risen five times within the last year.

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(NS&I) which also offers a variety of savings products too.

You can put money in and take it out whenever you want.

You need to put in a minimum of £25 to get started and you can invest up to £50,000.

Each £1 you put in Premium Bonds is an entry in to the monthly prize draw.

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