What are the odds of winning the Premium Bonds?

I like to save money in various ways, including using traditional savings accounts as well as various savings apps and Premium Bonds. We’re saving for a house at the moment which is a pretty big savings goal, but we still need to keep saving money for things like birthdays, Christmas and I like to keep adding to our emergency fund too.

What are Premium Bonds?

Premium Bonds are a savings product offered by National Savings & Investments (NS&I).

Instead of paying interest in the traditional way, each £1 Premium Bond is entered into a monthly cash prize draw.

You can buy a minimum of £25 in Premium Bonds each time and you can hold up to £50,000 in your account. You can only hold one Premium Bonds account.

Cash prizes are completely tax-free which used to be a big attraction when you could hold up to £50,000 in your account, but now that most people don’t pay tax on their savings, this doesn’t matter quite so much.

What are the odds of winning the premium bonds?

The odds of winning the premium bonds 24,500 to 1 each month. This figure is based on the odds of each £1 bond winning a prize. Obviously the more bonds you own, the higher your chances of winning.

The table below shows how much the average person might expect to win over a year based on how many Premium Bonds they hold:

Number of bonds	Average winnings
£100	£0
£1,000	£0
£15,000	£200
£31,000	£400

https://www.moneysavingexpert.com/savings/premium-bonds/

How is the draw carried out?

Every month, your Premium Bonds are entered into a prize draw. Any new bonds you buy will go into the draw one full calendar month after you buy them. For example, any bonds bought in June would first be eligible for the draw in August.

Each £1 bond has its own unique reference number. NS&I have a machine affectionately known as ERNIE (Electronic Random Number Indicator Equipment).  Each month, ERNIE randomly selects a number of winners at random.

How much money can you actually win on the Premium Bonds?

The top prize each month sits at £1,000,000, an amount not to be sniffed at! In total, NS&I pay out three million pounds in prizes every month, with the lowest value prize being £25. All prizes are completely tax-free too.

How do you know if you’re a winner?

If you’re lucky enough to win, then you’ll get an email at the beginning of the month telling you the good news. You’ll then need to log into your NS&I account in order to see how much money you’ve won.

You can also check whether you’ve won on the NS&I Prize Checker.

How can you access your Premium Bond winnings?

There are currently three different ways you can access your winnings.

• Paid directly into your bank account
• Automatically reinvested into Premium Bonds
• Paid by post

I’ve opted to have my prizes automatically reinvested so that I can steadily see my total savings creeping up and I’m not tempted to spend any of my winnings on anything other than a house! That million-pound prize really would come in handy for that!

How to grab yourself some Premium Bonds

OK, so overall, the odds of winning the Premium Bonds doesn’t make them the highest interest way to save your money. But if like me you love the thought that you could actually win big money, then Premium Bonds are a great investment.

You can buy Premium Bonds online, over the phone, by post, or by bank transfer. You will need to purchase a minimum of £25 in bonds each time you buy.

Premium Bonds for children

It’s been a bit of a tradition in our family for the grandparents to buy the children Premium Bonds when they’re little. I held some when I was younger, and now my children do too. It’s a lovely way to put some money away for them to access when they’re older with the added bonus that they may win some extra cash along the way too.

If you do want to buy Premium Bonds for children, then they need to be held in the name of their parent or legal guardian until they reach the age of 16. If you aren’t the parent or guardian, you can buy bonds for the child, but only the parent/guardian will be able to access and manage the Premium Bonds.

Do you hold any Premium Bonds? Have you been lucky and won any money yet? Let me know in the comments.

If you’re keen to save money and you want to try something a little different to the traditional savings methods, then you could try saving money with the Chip app.

 

Making and saving money is something I’m really passionate about. In fact, I have a load of emails ready to go filled with handy information on different ways to make more money. If this sounds like something you’d like to get involved with, then fill your details in below! You can also access loads of extra information in my Facebook group.