# Are Premium Bonds worth it?

> Quick answer · Last updated 4 July 2026

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## In short

Premium Bonds suit savers who want tax-free prizes and Treasury-backed security more than a guaranteed return. With the prize-fund rate at 3.6%, the expected return for a typical holding is below the headline — use our probability calculator before moving large sums.

Each £1 bond has the same monthly odds of winning; prizes are tax-free but not guaranteed. The prize-fund rate is a statistical average across all bonds — small holdings often win nothing in a given year.

For basic-rate taxpayers who have used the Personal Savings Allowance, the tax-free prizes can beat taxable easy-access accounts on paper. For smaller balances, a Cash ISA or competitive savings account usually delivers more predictable returns.

Capital is 100% backed by HM Treasury. You can cash in anytime. See our Premium Bonds guide and compare with easy-access savings before switching.

## Related

- [Premium Bonds explained](https://moneyguide.org.uk/savings/premium-bonds-explained/)
- [Premium Bonds probability calculator](https://moneyguide.org.uk/tools/premium-bonds-probability-calculator/)
- [Premium Bonds vs easy-access savings](https://moneyguide.org.uk/compare/premium-bonds-vs-easy-access-savings/)

## Primary source

nsandi.com/products/premium-bonds

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.