You can opt to have winnings paid straight into your bank account or to receive them by post in the form of a warrant like a cheque. Rather than a traditional interest rate like you would have with most savings products, premium bonds have an average rate of return. But if you have invested most of your savings and have several thousand pounds sat in cash, Premium Bonds might be a good option.
Where Premium Bonds can really come in handy in this regard is if you have a large amount of money. It all depends on your financial situation and how you feel about a prize draw rather than a conventional interest rate. Later on in this article, we compare the odds of winning Premium Bond prizes to the lottery jackpot and savings accounts. This compares to bank and building society savings accounts, which in the event of the provider going bust, are regulated by the Financial Services Compensation Scheme.
I say it is a perk for some people because most of us have a personal savings allowance PSA. Your winnings can buy more bonds. You may not want to tie your cash up in a fixed-term savings account where you lock up your money up to get a better interest rate , or take the more risky route of investing in the stock market. In that respect, Premium Bonds are a form of gambling akin to buying National Lottery tickets rather than being a savings or an investment account.
The actual cash you put into Premium Bonds is safe and remains intact. It comes down to the type of person you are. Does the element of surprise give you the feel-good factor? But these sorts of calculations are tricky and should not be relied upon.
This is because there are multiple prizes each month. The value of the total prize draw also changes each month as it reflects the number of bonds that customers have. If you think you might prefer a regular interest rate: Top savings accounts in How to invest, types of investing, buying and managing. Help with meeting goals, tax-friendly saving, saving for children.
First introduced in , Premium Bonds are now owned by around 21 million people in the UK. Here you can find out what Premium Bonds are, when they might be a good investment and how to go about buying and selling them.
Join our private Budgeting and Saving Facebook group for money-saving tips and support from a community of savers. Your chances of winning the top prize are very slim — most people will win smaller prizes or nothing at all. Find out more on the FSCS website.
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Calculator Divorce calculator. Baby costs calculator. As well as updating ERNIE so the fifth incarnation now uses quantum technology to generate random numbers and providing customers with the option to have prizes paid directly into their bank account, customers can also use voice-enabled technology to check to see if they have won a prize in each monthly draw. Premium Bonds holders can ask Alexa whether they have been lucky enough to win any of the millions of prizes paid out each month or use the official Premium Bonds prize checker online at nsandi.
Out of hours, all media team numbers are directed to the out of hours duty Press Officer. Navigation Main Content. Corporate Site. Monday 1 November marks 65 years since the first Premium Bond was bought A record ,,, Bonds were in the October prize draw A total of million prizes have now been paid out 65 years ago on Monday 1 November , the then Lord Mayor of London, Alderman Sir Cuthbert Ackroyd, visited a Post Office and purchased the very first Premium Bond.
These bonds are much more likely to pay out that things such as the National Lottery. The lottery has odds of one in 14 million, these bonds have odds of one in 26, Unlike savings accounts that are held with banks or building societies, these bonds do not pay out interest.
The only way that will receive a return on your investment is when you win a prize in the draw. The total interest rate that these prizes equate to is 1. This "interest rate" can change at any time, with the last peak being 3.
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