Guide to Premium Bonds

Fancy a flutter but don’t want to lose your cash? Premium Bonds could provide the answer.

Premium Bonds from National Savings & Investments (NS&I) give you the opportunity to scoop one of two million pound jackpots every month, without putting your money at risk.

There are loads of other cash prizes, ranging from £25 up to £100,000, so it’s hardly surprising nearly half the UK has put at least some money into the bonds.

But if you’re in the half that hasn’t, should you? Read our guide to find out.

How Premium Bonds work

Premium Bonds work in much the same way as a normal savings account, except you get the chance to win cash prizes rather than earning interest.

The minimum amount you can invest is £100, while the maximum you can put in is £40,000. This will rise to £50,000 later this year.

Each £1 you invest will buy you one bond. So, if you invest £150, you’ll get 150 Premium Bonds.

Every bond you own is then entered into a monthly prize draw. Winners are selected randomly by NS&I’s computer, Ernie (which stands for Electronic Random Number Indicator Equipment.)

“you could walk away a millionaire”
You must be aged 16 or over to buy Premium Bonds.

If you want to buy them for your children who are younger than this, you can hold them in your name until they reach the age of 16, at which point the bonds can be transferred over.

Where to buy them

You can buy Premium Bonds online at NS&I’s website or by calling 0500 500 000 or applying by post. Some Post Office branches sell them too.

What are my chances of winning?

Not brilliant unfortunately.

In a typical draw, each bond has a one in 26.2 BILLION chance of winning £1m. The odds of each bond winning ANY prize are better – but still not great – at 26,000 to 1.

Currently, the Premium Bond prize-fund rate is equivalent to an interest rate of 1.35% a year. This means that if you held every single premium bond there is, your winnings would work out at 1.35% of the amount you invested.


  • Obviously the biggest perk of Premium Bonds is that you could walk away a millionaire (if you’re exceptionally lucky, of course.) But given today’s sustained low interest rates, you might prefer to forgo the certainty of small returns in favour of the chance to ‘win big’.
  • Anything you do win is tax-free, which is particularly useful if you’re a higher rate taxpayer.
  • You can cash in your bonds whenever you want, so you’re not tying your money up for years.
  • If you do win, you can re-invest your money back into bonds if you want to.
  • There’s also, arguably, no safer home for your money. Premium Bonds are operated by NS&I, which is backed by the Treasury. This means your savings are 100% secure.


  • If you’re NOT lucky enough to win regular prizes, then your cash will steadily be eroded by inflation, (the rising cost of living). 
  • Premium Bonds don’t offer a regular income from your savings, or guaranteed returns. This means they’re only suitable if you’re prepared you may win nothing at all.
  • You can’t buy them as a gift – unless it’s for your child, or grandchild.

I think I had Premium Bonds years ago – how do I track them down?

Did you know there’s currently around £50m sitting in unclaimed Premium Bond prizes?! The good news is, NS&I has a Tracing Service to help reunite people with forgotten bonds and prizes. You can download a tracing form here.

Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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