A Complete Guide to Premium Bonds (UK)

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Premium Bonds have been around since the mid-1950s, with more than 23 million people in the UK choosing them as a way of saving and investing their hard-earned money (more than £85 BILLION in total), but what exactly are they? And are Premium Bonds worth it?  

This complete guide will tell you all there is to know about Premium Bonds, how they work and whether you should consider investing in them or not.


What are premium bonds?

Issued by National Savings & Investment (NS&I) back in 1956, Premium Bonds are investment products which, instead of paying interest, grant entry into a monthly prize draw to win a tax-free sum of money between £25 and £1million. 

How do they work?

For every £1 invested in Premium Bonds, you get 1 unique ‘bond number’ – each number acts as an entry into the monthly prize draw. 

In order to purchase Premium Bonds, you must invest at least £25 every single time you top up your account. You can then continue to invest until you reach the maximum Premium Bond holding of £50,000.  

Once a bond has been held for an entire month, its unique bond number is entered into the next Premium Bond draw to win a tax-free cash prize of up to £1 million. 

You must be at least 16 years of age to invest in Premium Bonds and they are often bought for children, grandchildren or great-grandchildren as an alternative to placing money into a children’s savings account or ISA. 

How much are Premium Bonds?

1 entry into a Premium Bond prize-draw is the equivalent of a £1 investment, so in effect, Premium Bonds only cost £1, although there is a minimum investment of £25.

This might sound like a great deal, but it is worth remembering that the money you invest does not earn interest, so you are completely reliant on the monthly prizedraws to make any profit on your investment.

Should you invest in Premium Bonds?

Buying Premium Bonds might be worthwhile for you if:

  • You like the possibility of winning cash prizes 
  • You are buying for a child that is under the age of 16 
  • You have at least £25 to invest 

However, it should be noted that when buying Premium Bonds, you:

  • Are not guaranteed a regular (or any) return on your money 
  • The rate of inflation could decrease the value of your money 
  • Won’t be able to invest jointly with someone else 

How do you buy Premium Bonds?

To buy Premium Bonds, you must be at least 16 years of age and be willing to invest between £25 and £50,000. 

You can buy Premium Bonds:

  • Online – by visiting the NS&I website and logging into your account 
  • Over the phone – by calling and giving your card details 
  • Through the post – by sending a Premium Bonds application form and cheque 
  • Bank transfer/standing order – by setting up a regular transaction with your bank (account details can be found on the NS&I website) 

Remember, each time you purchase Premium Bonds, you must spend at least £25.  

When is the best time to buy Premium Bonds?

Premium Bonds must be held for 1 full calendar month before they are eligible to be entered into a prize draw, so whenthe time you buy them doesn’t really matter. 

For example, whether you purchase the bonds on the 1st of March or 31st of March, you’ll still have to wait until May’s prize draw to be in with a chance of winning. 

Premium Bonds orizes

Prizes are all paid in cash and range from between £25 and £1 million. The table below shows the Premium Bond prize breakdown, as well as the quantity of each prize that is given out each month, and the corresponding chances of winning (for March 2020). 

Premium Bonds – Odds of winning


Prize value
No. of prizes
Odds of winning with a £1 bond
£1,000,000 2 1 in 42.07 billion
£100,000 6 1 in 10.07 billion
£50,000 12 1 in 4.2 billion
£25,000 23 1 in 1.98 billion
£10,000 61 1 in 820 million
£5,000 119 1 in 383 million
£1,000 1,990 1 in 38.6 million
£500 5,970 1 in 10.4 million
£100 27,322 1 in 2.4 million
£50 27,322 1 in 1.4 million
£25 3,420,702 1 in 24,500

Source: NS&I and MoneySavingExpert (correct as of March 2020)

When are Premium Bonds drawn each month?

One of the most important questions in relation to Premium Bonds is: have I won? 

The winners of each prize draw are usually displayed on the NS&I website on the 2nd day of the month, but you might be able to find out on the 1st by entering your NS&I login details. 

How can I check if my Premium bonds have won?

Simply use your NS&I number, password and your surname to log into the website. Alternatively, enter the holder’s number into the Premium Bonds prize checker to see if you have any unclaimed prizes. 

How are Premium Bonds winners notified?

The quickest way to find out is by using the Premium Bonds prize checker, either on the NS&I app or website. You can also enable the Premium Bonds prize checker skill on an Amazon Alexa smart speaker. 

Prizes of more than £5,000 will not be paid out automatically and you will have to fill in a claim form, which will be sent to you in the post, to inform NS&I how you would like to be paid. 

If you’re one of the one-in-a-multi-billion chance winners of the £1 million jackpot, an NS&I representative will visit you in person to deliver the good news – remember to always ask them for ID before entering into conversation with them. 

Are Premium Bonds safe?

NS&I and Premium Bonds are backed by the Government, meaning that your money is well and truly safe. 

However, this should not be your sole reason for investing in Premium Bonds instead of putting your money into a savings account, as nearly all savings accounts these days are safe and fully licensed.

How to cash in Premium Bonds

Cashing in Premium Bonds is straightforward and can be done either online, via post or over the phone. You can choose to cash in either all or some of your bonds at any time. 

How long does it take to cash in Premium bonds?

According to NS&I, it can take up to 8 days for your withdrawn funds to reach your bank account. You can also opt for the funds to be withdrawn after the next prize draw, if you wanted one last chance of winning. 

Are Premium Bonds worth it?

The big question in this guide – are Premium Bonds a good investment? 

Rather than giving you a straight yes or no answer, let’s look through some of the figures to see what chances you have of winning big (or even winning small) when investing in Premium Bonds. 

Note: As of May 2020, the Premium Bond rate (which is used to calculate how much the average person will earn on their investments over a 1-year period) will drop from 1.4% to 1.3%. These figures are a representation of rates prior to May 2020. 

Each £1 Premium Bond investment has a 24,500/1 chance of winning a cash prize. With consideration for the minimum investment of £25, your chances of winning increase to around 1.2%. 

An investment of £100 would increase your chances of winning a prize to around 5%, while a £1,000 investment would up your chances to almost 50%. An investment of £10,000 or more would almost guarantee that you win at least a small cash prize with chances of 99.99%, however it should be noted that up to 90% of the 3 million prizes dished out by NS&I do not exceed £500 in value. 

NS&I’s Premium Bond rate of 1.4% (1.3% from May 2020) suggests that the average person will earn £1.40 for every £100 they invest, but in real terms, this cannot be the case – remember, the minimum you can pay in is £25, so there are absolutely no guarantees that you’ll win a single penny.  

If you’re really optimistic and fancy your chances of winning the 1 of the 2 £1 million monthly jackpots, you may be disappointed to learn that the chances of 1 of your bonds winning the big prize is around 1 in 43.07 billion.  

As a direct comparison, it was reported in 2018 that your chances of winning the lottery are around 1 in 45 million. 


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