Premium Bonds – Are they worth it?

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From the start of this month, you can buy Premium Bonds with just £25 - down from a previous minimum of £100.

Premium Bonds are essentially a big monthly lottery offered by the government through NS&I, where you stand to gain up to £1m in prizes.  

 You buy bonds to enter, which you can then cash in at any time. 

I use Premium Bonds as place to stash the majority of my medium term savings, alongside high interest current accounts.


I know my money is safe and can be accessed quickly (within a couple of days).

Plus I like the excitement of being in with the chance of winning up to £1million each month.


However, there are no some downsides of putting large amounts of money in Premium Bonds.


How PBs work


The prizes range from £25 and go up to £1million, and you can hold between £25 and £50,000 of bonds.

But the odds of winning anything at all are very low and there is no interest offered alongside the prizes.

NS&I says the prize fund rate is currently 1.40% and the odds of each individual bond number winning any prize are currently 24,500 to 1. 

This often means that you could earn more on your money by having it in savings or investments.

I held £100 for about two years and didn't receive anything back, I have since built up my holdings but never received more than £25. 

It means that I have had a return far below 1.4%. 

However, I'm willing to risk lower returns for the prize draw and also have money in other accounts where returns are guaranteed. 

What do you think? Do you hold Premium Bonds and are they worth it?



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