They are not strictly a savings account in the traditional way that we have described savings accounts in previous pages, in so far as you do not earn a fixed rate of interest on your savings, you are entered in a monthly draw and need to check the premium bonds prize checker to see if you have won a share of the prize fund.

How Do NS&I Premium Bonds Work?
What happens is that you buy Premium bonds at a price of £1 each, in £25 batches, up to a current maximum value of £50,000 per person. You can buy premium bonds online, or in the post office via a premium bonds application form.

Premium Bonds Have I Won?
The overall odds of winning a prize have recently increased from 34,500 to 1, to 24,500 to 1, and if you are fortunate enough to win a prize, there is a 95% chance that that prize will be £25.

The chance of winning one of the £1m prizes is an eye-watering 57 billion to 1, but on the bright side, you don’t lose your money each month, as you would with the Lotto. You automatically get re-entered into the next monthly draw, unless you take your money out.

The number of prizes and distribution of prizes is determined by the prize fund size, and current interest rate applied to the fund. These change frequently, so keep up to date online.

Premium Bond Prizes
Every month more than a million prize-winning numbers and premium bond prizes are chosen at random by ERNIE (Electronic Random Number Indicator Equipment) including the lucky £1m winners.

Other premium bond prizes include £25, £50, £100, £500 £1,000, £5,000, £10,000, £25,000, £50,000 and £100,000.

The current Premium bond prize fund interest rate is 1.0%, this rate can vary like any other interest rate, but it gives an indication of the potential prize fund each month and your odds of a win with average luck.

It should be understood that saving sums such as £50, £100, or £500 is not likely to result in a win for quite some time, if ever. The only way to increase your chances of a prize is to buy more bonds.

If you want to know what your odds of winning a premium bond prize is, then you can use a premium bonds calculator.

A Premium bonds calculator can be found here

What are the Premium Bonds Draw Dates
The premium bonds draw dates happen on the 1st of every month, so long as the 1st falls on a week day. If the 1st falls on a weekend, then the premium bonds draw will be carried out on the next working day.


Premium Bonds Prize Checker
Many people now use the online premium bonds prize checker to see if they are premium bond winners. This is because you can usually see the results 2 or 3 days before the winners email is sent out.

Advantages of Premium Bonds
These are some of the advantages of premium bonds

Savings are 100% safe and backed by the UK Government

Premiums bonds can be good fun

There is a chance of winning some big prizes

All prizes are tax-free

You can buy premium bonds for children

Disadvantages of Premium Bonds
These are some of the disadvantages of premium bonds

You may not win anything at all

You have to wait a month before being entered into the prize draw

You can usually get a better rate of return with other savings products

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