Are Premium Bonds worth it?
Where a link is marked *, it is a partner link — we receive commission at no extra cost to you. Links without a * earn us nothing. How we make money.
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.
Last reviewed:
Reviewed by Kaiser Khan
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.
Primary source: nsandi.com/products/premium-bonds
Part of our Savings & ISAs
This quick answer sits inside our wider savings & isas hub — with sub-guides, calculators and step-by-step explainers on the same topic.
Read the full savings & ISAs guide →