It comes after the prize fund rate was last increased from 3% to 3.15% for February’s draw and means it stands at a 14-year high. It was last higher at 3.4% in May 2008.

The latest rise means there will be more prizes worth between £50 and £100,000, fewer £25 winners and the same two jackpot winners (£1m) in each draw.

There will be £15m more in prizes up for grabs, with the total estimated value of prizes for March standing at £329.3m. In total, there will be nearly five million prizes (worth between £25 and £1m).

With the prize fund rate rising to 3.3% tax-free next month, this means Premium Bonds beat the top-paying easy access savings rate at 3.1% AER, offered by Paragon Bank.

However, Premium Bonds aren’t like normal savings accounts as they don’t pay interest. Instead, the interest that should be paid is used to fund the monthly prize draw.

NS&I – the Government’s savings arm – confirmed the odds of winning will remain the same at 24,000-to-one.

It also announced the interest rate on the Direct Saver and Income Bonds will rise from 2.6% gross to 2.85% gross from today for 600,000 customers.

There is no change to any other accounts, though NS&I has recently launched 4.2% Green Savings Bonds and one-year fixed rate bonds.

NS&I chief executive, Ian Ackerley, said: “Premium Bonds are one of the nation’s most loved ways to save, giving people the monthly anticipation of a potential win while knowing their money is 100% safe. We’re also giving a Valentine’s Day boost to our Direct Saver and Income Bonds customers who will see their interest rates rise from today.

“We are committed to ensuring our products remain attractive and our customers can continue to save with confidence. Today’s changes mean that we continue to balance the interests of savers, taxpayers and the broader financial services sector.”