Are Premium Bonds worth it? Odds, prize rate and who they suit (2026)
How Premium Bonds work, the 4.35% prize fund rate and 21,000 to 1 odds, what most people actually win, and when Premium Bonds beat a savings account or cash ISA.
In this guideShowHide
How Premium Bonds work
- You buy bonds from NS&I, which is backed by the Treasury.
- Each £1 bond goes into a monthly prize draw.
- Prizes range from £25 to £1 million and are tax free.
- You can hold from £25 up to £50,000.
- You can cash in at any time and get back what you put in.
Your money never goes down in value, but it also does not earn guaranteed interest.
The numbers
According to MoneySavingExpert, from the September 2026 draw:
| Figure | |
|---|---|
| Prize fund rate | 4.35% |
| Odds of each £1 bond winning in a month | 21,000 to 1 |
| Maximum holding | £50,000 |
Why most people win less than 4.35%
The prize fund rate is the total paid out divided by all bonds held. Two £1 million jackpots and other large prizes take a share of that, but almost nobody wins them. With typical luck, your return is usually lower than the headline rate, and with a small holding you may win nothing for months.
Who Premium Bonds suit
| Good fit | Poor fit |
|---|---|
| Higher and additional rate taxpayers over their Personal Savings Allowance | People with small savings who want steady interest |
| People who have used their £20,000 ISA allowance | Anyone who needs a guaranteed income from savings |
| Savers who value 100% Treasury backing above £120,000 | People who find a run of no wins frustrating |
For a basic rate taxpayer under the £1,000 savings allowance, a good easy-access account or cash ISA often pays more with certainty.
Premium Bonds vs a savings account
Premium Bond prizes are tax free, so compare them with a savings account's rate after tax. For a higher rate taxpayer above the allowance, a 4% savings account pays 2.4% after 40% tax, falling to 2.24% from April 2027 when the rate rises to 44%. That makes Premium Bonds more competitive for them.
How to check if you have won
Use the NS&I prize checker or app. You can choose to have prizes paid into your bank or automatically reinvested in more bonds.
Free toolCompound interest calculatorSee how a lump sum and monthly savings could grow over time, and how much fees cost you.Common questions
How much do I need in Premium Bonds to win regularly?
With 21,000 to 1 odds per bond, someone with about £21,000 would expect roughly one prize a month on average, usually £25. Luck still varies a lot.
Are Premium Bonds safe?
Yes. NS&I is backed by HM Treasury, so 100% of your money is secure, with no limit.
Can I lose money with Premium Bonds?
You always get back what you put in, but inflation reduces its value over time if you win little.
This is general information, not personal tax or financial advice. Tax rules change and depend on your circumstances, so check GOV.UK or speak to an accountant before acting.