Premium Bonds are a form of investment offered by National Savings and Investments (NS&I).
Instead of earning interest on their money, bond holders are entered into a draw at the start of every month, with tax-free prizes worth between £25 and £1m.
While they’re unlikely to offer you much in the way of a regular income, there is a tiny opportunity of huge winnings. As such, Premium Bonds have become the UK’s biggest saving product, with more than 22 million people holding billions in them.
How do I buy Premium Bonds?
You can buy Premium Bonds for yourself or for a child under 16 online here, or you can call NS&I free on 08085 007 007, from 7am to 10pm every day. You’ll need to have your debit card details ready.
Alternatively, you can apply by post at NS&I, Sunderland SR43 2SB, using an application form that you can find and print here.
Each bond is £1, but you need to pay in a minimum of £25 for each investment. The maximum amount you can hold in Premium Bonds is £50,000.
If you think there is a chance that you could have Premium Bonds, but you are not sure, there is a tracking service on the NS&I website.
To check if you have any bonds you need to fill out a form with your personal details and send it off. If you do have Premium Bonds, then you will be contacted.
How likely am I to win the Premium Bonds?
At the start of this year, the interest rate of its prize fund rose from 2.2 per cent to 3 per cent, before increasing further to 3.3 per cent.
But now, after a further increase, it stands at 3.7 per cent – with yet another jump to 4 per cent from August.
A holder’s odds of winning remain at 24,000 to 1 in July, though there are now more £100,000, £50,000, £25,000, £10,000 and £5,000 prizes available.
However, from August the odds of winning will increase to 22,000 to 1. NS&I estimates that the August changes will see an extra £30m added to the prize fund, with 460,000 extra prizes up for grabs.
It estimates that the number of £5,000 prizes won by customers in August will go from 1,417 to 1,539, while the number of £10,000 prizes will increase from 707 to 769.
NS&I chief executive Dax Harkins said: “I’m delighted that we’re able to improve the odds to the best they have been in almost 15 years, with more prizes, more excitement and more life-changing wins for savers up and down the country.
“These changes will benefit millions of NS&I’s savers who have money in Premium Bonds, Direct Saver and Income Bonds.”
How to check if you’ve won
If you hold bonds and want to check if you’re in line for a prize, you can use the NS&I online prize checker here, or can download the free app from iOS or Android, with the results usually accessible from the second day of the month.
Amazon Alexa devices can also check for you, “remembering” back across the past six prize draws.
Prizes don’t carry a time limit, so you can claim as far back as the original 1957 draw. However, according to MoneySavingExpert, as of November 2021, there were more than two million unclaimed Premium Bonds prizes, with a total value of almost £75m.
The bonds are often bought for a child, who subsequently forgets about them, while prizes can also be missed if NS&I don’t have the correct address for claimants.
Bond holders can ensure their details remain up to date, and also register to have prizes paid directly into their bank account by managing their account online on the NS&I website.
Registering online can also prevent prizes going missing in the post, with a report last year revealing the scale of such problems.
A Freedom of Information request from Money Saving Expert in April 2019 found that more than 180,000 prizes had not been delivered, with a combined value of £8m – including £66,900 in the previous year.
