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It comes as the current average one-year fixed rate stood at 5.30pc on Monday, according to financial analysts Moneyfacts, and the top accounts offer more than 6pc returns.
Anna Bowes, of advice site Savings Champion, said: “Premium Bonds are different to normal savings accounts, which is why they remain so popular, especially with higher rate taxpayers, as any prizes won are tax-free.
“While you are not guaranteed to win a prize on the Premium Bonds, the interest rate applied to the prize fund is now very competitive, so could stop those who were on the brink of taking their money out for a guaranteed return from another bank or building society – in case they win one of the big prizes – especially as there are a greater number of bigger prizes up for grabs.”
Laura Suter, of broker AJ Bell, said many of the smallest accounts had likely been forgotten by savers who had been given the Premium Bonds in early life.
She said: “Lots of people are bought Premium Bonds when they are children or later in life as presents, with money sitting in accounts for years.
“It means that many of these accounts with small figures in them have likely been long forgotten by the account holders – either because they can’t be bothered with the hassle of finding the paperwork to withdraw their small sums or because they have entirely forgotten they have the accounts.”
Sarah Coles, of broker Hargreaves Lansdown, added: “If you’re holding large sums for long periods of time, and don’t win, your holdings will lose spending power once inflation is taken into account – and at the moment that’s a significant issue.
“It means some people will opt for the steady trickle of interest from a savings account instead. Others, meanwhile, are prepared to take the risk in return for the chance of a win – and the vanishingly small chance of winning a life-changing sum of money.”
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