What Are Premium Bonds?

Updated April 2025

NS&I Premium Bonds are only issued by National Savings & Investments and are an alternative type of savings account you can put money into, and take out of, whenever you want.

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.

Then, one full calendar month after you bought your bonds, you will be entered into a monthly prize draw to win a variety of cash prizes. These prizes range from £25 up to £1m in value, and each bond has an equal chance of winning, so the more bonds you buy, the more your chances improve. Even if you don't win one month, you can then wait for the next premium bond draw date to see if you have more luck then.

Premium Bonds Have I Won?

The overall odds of winning a prize have recently decreased from 21,000 to 1, to 22,000 to 1, and if you are fortunate enough to win a prize, there is a 95% chance that that prize will be £25 / £50 or £100.

The chance of winning one of the £1m prizes is an eye-watering 60 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.

For example, if the prize fund is worth £100m and the interest rate is 4%, there will be £4m / 12 of prizes distributed that month, so circa £333,000. In reality, the prize fund is much larger than this, probably in the hundreds of billions of Pounds.

The popularity of Premium bonds has always been high, in fact, nearly half the population of the UK now owns them, and as they are issued by National Savings & Investments, they are 100% safe, having the backing of the UK Government.

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 3.80%, (WEF April 2025) down from 4.00 % the previous month. 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

How are premium bond prizes shared

NSI split the prizes into three value bands – higher, medium and lower – and allocate a percentage share of the monthly prize fund to each band. The higher and medium bands are allocated 10% of the prize fund each, and the lower band uses the remaining 80% of prize funds.

What are the Premium Bonds 2025 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.

There are 12 premium bonds draw dates per year.

Month Prize draw date

Jan-25 Thursday 2 January

Feb-25 Monday 3 February

Mar-25 Monday 3 March

Apr-25 Tuesday 1 April

May-25 Thursday 1 May

Jun-25 Monday 2 June

Jul-25 Tuesday 1 July

Aug-25 Friday 1 August

Sep-25 Monday 1 September

Oct-25 Wednesday 1 October

Nov-25 Monday 3 November

Dec-25 Monday 1 December

Maximum Premium Bonds Per Person

The maximum premium bonds you can hold is £50,000. If you held the maximum of £50,000, you would on average, win one-two prizes a month, although they would most likely all be £25.

That said, somebody has to win the big prizes each month, and so there is always a chance you could get lucky, even if it is a very small chance! Many wealthy individuals hold the maximum premium bonds limit as it is a tax efficient way to earn income.

What are the chances or odds of winning Premium Bonds

The chance of winning premium bonds prizes are determined by the number of Bonds you hold, with each Bond having an equal chance of winning.

As of April 2025, the odds of winning a prize with each £1 Bond number are 22,000 to 1. For example, if you hold £22,000 worth of Premium Bonds, which is equal to 22,000 Bond numbers, your odds of winning a prize in any given month are about 1 win. If you held half as many you should win 0.5 times per month, and if you held double you should win 2x per month. However, it's important to note that these odds are only an approximation, and there's no guarantee that you'll win a prize.

It's also worth considering the fact that the prize fund rate, which determines the amount of money allocated for prizes, can change over time. The current prize fund rate is 3.80%, which means that the total amount of money paid out in prizes in a given year is approximately equal to 3.80% of the total value of Premium Bonds in circulation. This means that the average return on investment for Premium Bonds is currently around 3.80% per year, although this is not guaranteed and is subject to change.

In summary, while the chances of winning a prize with Premium Bonds are relatively low per £1 bond, the potential for tax-free, life-changing prizes can make them an attractive investment option for some individuals. However, it's important to consider your individual circumstances and investment goals before making a decision, and to be aware of the potential risks and limitations of this type of investment.

Are Premium Bonds Safe?

One of the first questions people ask when thinking about investing in premium bonds is "are premium bonds safe?" This is of course a very sensible question, and fortunately for us all, premium bonds are very safe indeed. They are backed by the UK Government, and therefore premium bonds are considered to be 100% safe and secure. i.e. you will not lose any of your investment.

Premium Bond Winners

Premium bond winners will be notified either by email, online using the premium bonds App, or by letter along with the cheque or warrant. If you are one of the lucky £1m premium bond winners, then you will get a personal visit from Agent Millionaire!

How much are Premium Bonds?

Premium Bonds are available to purchase in multiples of £25, with a minimum investment of £25, and a maximum investment of £50,000 per individual, so in answer to the question how much is a premium bond? each and every bond costs and is worth £1.

Premium Bonds Prize Checker

The Premium Bonds Prize Checker is an online tool provided by National Savings and Investments (NS&I) to help people keep track of their Premium Bonds investments.

To use the NS&I Premium Bonds Checker, investors simply need to enter their holder’s number or their unique NS&I number into the online tool. They can then see their total number of Premium Bonds, the value of their holdings, and any prizes they have won in the last six months. The tool also shows a breakdown of past prizes, including the month and year they were won, the amount of the prize, and the location of the winner.

The Premium Bonds Checker is a useful tool for investors who want to keep track of their Premium Bonds and ensure they don’t miss out on any prize money they have won. By checking the tool regularly, investors can see if they have won any prizes and can claim them if necessary.

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

It has to be said, that although you can usually earn more interest with a standard savings account, than with Premium bond wins, nothing quite compares to the expectation and hope, of a big prize on the 1st of each month!

When is the Best Time to Buy Premium Bonds?

The best time to buy premium bonds is on the last day of the month, as this means they are only held by NSI for one month and one day, without being entered into the prize draw. If you bought them at the beginning of the month, then they would be held for nearly two full months before being entered. So to sum up, the best time to buy premium bonds is on the last day of the month.

How can you Buy Premium Bonds?

If you're interested in buying Premium Bonds, there are a few ways you can do so.

Online: One of the easiest ways to buy Premium Bonds is online through the NS&I website. You'll need to create an account with NS&I first and provide some personal information, such as your name, address, and bank details. Once you've set up your account, you can buy Premium Bonds in increments of £25, up to a maximum investment of £50,000.

Over the phone: If you prefer to buy Premium Bonds over the phone, you can call NS&I on 08085 007 007. You'll need to have your NS&I number and your password to hand, or your personal details if you don't yet have an account. You can purchase Premium Bonds in the same way as online, with a minimum investment of £25 and a maximum of £50,000.

By post: If you prefer to buy Premium Bonds by post, you can download a premium bonds application form from the NS&I website and send it by post. You'll need to provide your personal details, including your bank details if you want to set up a direct debit. You can also send a cheque for the amount you want to invest, made payable to NS&I.

At a post office: You can also buy Premium Bonds at any UK post office, although the minimum investment is £25 and the maximum is £50,000. You'll need to provide your personal details, including your bank details if you want to set up a direct debit, and your payment.

What is the current Premium Bonds Interest Rate?

As of April 2025, the current Premium Bonds interest rate is 3.80%. This means that for every £1000 you invest in Premium Bonds, you can expect to earn an average of £38 in interest per year. The interest is not paid out on a regular basis like with other savings accounts, but rather, it is paid out in the form of tax-free prizes. Each month, a number of bond holders are randomly selected to win tax-free prizes ranging from £25 to £1 million. The more bonds you have, the higher your chances of winning a prize.

When is the next Premium Bond draw?

Premium Bond draws usually take place on the first day of each month. You can check the exact date of the next draw on the official website of NS&I or by calling their customer service line. It's worth noting that the date of the draw may occasionally be altered due to bank holidays or other unforeseen circumstances.

Premium Bonds Prize Breakdown

This list of premium bonds prizes is correct as at April 2025

How we share out Premium Bonds prizes.jpeg

How to buy Premium Bonds online

Buying premium bonds online is a quick and easy process. Here are the steps you need to follow:

Go to the NS&I website: Start by visiting the official website of National Savings & Investments (NS&I) at www.nsandi.com.
Register for an account: If you don't have an NS&I account yet, you'll need to register for one. Click on the "Register" button and fill out the required information, including your name, address, and contact details.
Choose your bond: Once you've registered and logged in, you can choose the type of bond you want to buy. Select the "Premium Bonds" option from the menu.
Enter the amount: Next, you need to decide how much you want to invest in premium bonds. The minimum investment amount is £25, and the maximum is £50,000.
Provide payment details: Once you've chosen the amount you want to invest, you'll need to provide payment details. You can pay by debit card, standing order, or bank transfer.
Confirm your purchase: After you've provided payment details, you'll be asked to confirm your purchase. Double-check all the information to make sure it's correct, then click on the "Confirm" button.
Wait for your bonds to be allocated: Once you've confirmed your purchase, you'll need to wait for your bonds to be allocated. This usually takes up to two weeks.
Check your Bonds: Once your bonds have been allocated, you can check them by logging into your NS&I account.

That's it! You've successfully purchased premium bonds online.

How to cash in Premium Bonds

If you are thinking of cashing in your Premium Bonds, the process is quite straightforward. Here are the steps to follow:

Check if you have won any prizes: Before you cash in your Premium Bonds, make sure to check if you have won any prizes in the latest draw. You can do this by using the Premium Bonds prize checker online, through the NS&I app, or by calling the Premium Bonds Helpline on 08085 007 007.
Log in to your NS&I account: To cash in your Premium Bonds online, you need to have an NS&I account. If you don't have one, you can create one online by visiting the NS&I website.
Select the 'Cash in your Bonds' option: Once you have logged in to your NS&I account, select the 'Cash in your Bonds' option. You will be asked to provide details such as the amount you want to cash in and your bank account details.
Confirm the transaction: Review the details of your transaction and make sure they are accurate. Once you are satisfied, confirm the transaction to complete the process.
Wait for the money to be transferred: Once you have confirmed the transaction, the money will be transferred to your bank account within 3 working days.

If you don't have an NS&I account, you can still cash in your Premium Bonds by completing a paper form and sending it to NS&I by post. The form is available on the NS&I website, or you can request a copy by calling the Premium Bonds Helpline. The process is similar to the online process, except that you will need to provide your bank details on the form, and it may take longer for the money to be transferred to your account.

It is worth noting that when you cash in your Premium Bonds, you forfeit your chances of winning any future prizes. If you want to keep some of your Premium Bonds, you can cash in part of your holding and keep the rest. You can also reinvest the money you receive from cashing in your Premium Bonds in other NS&I products, such as ISAs or savings accounts.

Can you buy Premium Bonds with a Credit Card?

No NSI do not accept credit card payments for premium bonds.

How do Premium Bonds work

Instead of earning interest, your money is entered into a monthly prize draw, with the potential to win tax-free prizes ranging from £25 to £1 million.

Here’s how it works:

Buy Premium Bonds: You can buy Premium Bonds online from NS&I, by phone or by post. The minimum investment is £25, and the maximum investment limit is £50,000. Each £1 you invest buys one Bond number, and you can buy up to 50,000 Bond numbers.

Wait for the Draw: Once you’ve bought your Premium Bonds, you’ll be entered into a prize draw each month. The draw takes place on the first day of the month, and the winning Bond numbers are chosen by a random number generator.

Check if You’ve Won: If you’re lucky enough to win a prize, NS&I will notify you by post, email, or text message. You can also check the results of the draw on the NS&I website or by using the Premium Bonds prize checker app.

Repeat: Your Premium Bonds remain in the prize draw until you choose to cash them in or they are chosen in a prize draw. You can also buy more Premium Bonds at any time to increase your chances of winning.

It’s important to note that Premium Bonds are not a guaranteed investment, and you may not win any prizes. However, because the prizes are tax-free and there is no risk to your initial investment, they can be a popular way to save money for some people.

Are Premium Bonds Worth It?

Whether or not premium bonds are worth it is a subjective question, as it depends on individual circumstances, financial goals, and risk tolerance. Here are some factors to consider when deciding if premium bonds are a good investment for you:

Chance of Winning: With premium bonds, you have the chance to win tax-free cash prizes every month. While the odds of winning are relatively low (currently around 1 in 21,000), the prizes can be substantial, with a top prize of £1 million. If you enjoy the excitement of the possibility of winning, premium bonds may be worth it for you.

No Risk of Losing Money: Unlike other investments, premium bonds have no risk of losing money. Your initial investment is guaranteed to be returned to you, and you can cash in your bonds at any time without penalty. If you are risk-averse and prefer a safe investment, premium bonds may be worth it for you.

Lower Returns: While you can potentially win substantial cash prizes with premium bonds, the overall return on investment is relatively low. The current interest rate is 4.4%, which means that on average, you will earn £4.40 for every £100 invested per year. If you are looking for higher returns on your investment, premium bonds may not be worth it for you.

No Regular Income: Premium bonds do not pay out regular income like other investments such as stocks, bonds, or rental properties. If you need a regular income stream from your investments, premium bonds may not be worth it for you.

Tax-Free Prizes: One advantage of premium bonds is that any prizes you win are tax-free. This means that if you win a substantial prize, you get to keep the entire amount without having to pay taxes on it. If you are in a high tax bracket, this can be a significant benefit and may make premium bonds worth it for you.

Ultimately, whether or not premium bonds are worth it for you depends on your individual financial goals, risk tolerance, and investment preferences. If you are comfortable with the lower return and the chance of winning cash prizes, and you value the safety of your initial investment, premium bonds may be worth it for you. However, if you are looking for higher returns, regular income, or more control over your investments, you may want to consider other investment options.

You do need to consider your own personal situation before you can answer the question, are premium bonds worth it?

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