Starting in August, there will be an additional millionaire and also 52,000 more tax-free prizes.
The details of two jackpot winners will be announced on 1 August 2014.
NS&I has announced that the Premium Bonds annual prize fund rate will increase from 1.30% to 1.35% from 1 August.
The increase in the prize fund rate means that the number of prizes in each value category will increase or stay the same.
Premium Bonds holders have had the opportunity to increase the amount they invested from £30,000 to £40,000 since June 1 – another Budget measure.
The last time the maximum investment limit for Premium Bonds went up was in May 2003 when it increased from £20,000 to £30,000.
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Jane Platt, chief executive of NS&I, said: "Premium Bonds are one of the nation's favourite ways to save.
"This news is good news all round as we're able not just to add an additional jackpot prize of £1 million, but also to increase the overall number of prizes.
"Many of our savers have taken the opportunity to increase their savings in Premium Bonds and as a consequence increase their chances of winning."
The annual prize fund rate of 1.35% is paid on the total number of eligible Bonds in the draw, which since the maximum investment was increased from £30,000 to £40,000 in June, has increased by over £1.3 billion.
Consequently, the prize fund is estimated to increase from £51,988,425 in July 2014 to £55,517,300 in August 2014, and the number of prizes is estimated to increase from 1,845,745 to 1,898,030.
Over 21 million people hold Premium Bonds.