Premium Bonds are proving to be the nation's favourite savings product, with £1.5bn being invested in the bonds in the 12 months to April 2011 – nearly twice as much as in the year below.
That's despite the fact that the prize fund rate for someone with 'average luck' is just 1.5 percent. Andrew Hagger of Moneynet opines: 'It's rates that are a more pressing concern for savers now, not their bank's balance sheet. Savers are waking up to the damaging effect that inflation can have on their money.'
As well as in Premium Bonds, savers seem to like the Savings Certificate too, especially the index-linked savings products that were withdrawn from sale last July. They offer a guaranteed, real, tax-free return. NS&I put the product back on the market in May, and almost instantly £613m of savings were withdrawn from build society accounts up and down the country. We know where it was going.
If demand for this product soars too high, it may well be withdrawn again. So hurry fast and invest quick.