National Savings & Investments (NS&I) is one of the UK’s best-known financial brands, particularly for its popular Premium Bonds prizes. But, even if you're a big fan, did you know there are several Premium Bonds alternatives that could be more lucrative?
Savers who are keeping their money in Premium Bonds saw their chances of landing a big prize diminish slightly from the March draw, as the prize fund rate dropped from 4.65% to 4.4%.
At the same time, the best savings accounts have been dropping their rates due to the Bank of England holding interest rates for the seventh time. So the allure of potentially becoming a millionaire has kept Premium Bonds a staple of many savers’ portfolios.
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If you have Premium Bonds, you should check if you're a winner following July's prize draw, which saw more than 5.9 million prizes dished out worth more than £456 million. The prizes vary in size from £25 to a cool £1 million.
The government-backed institution protects every penny you save with them – a hugely attractive perk in times of financial difficulty. So much so that investors turned to NS&I on the back of the collapse of Silicon Valley Bank.
Beyond protecting your money, NS&I’s main pull is its Premium Bonds. They are the nation’s most popular savings account, with millions of us holding at least some money in them.
The big downside to Premium Bonds is that you won’t earn any interest on the money you have invested in them. NS&I publishes a ‘prize rate’, which is supposed to give an indication of the sort of return you’ll get from the money kept in bonds if you have average luck.
The prize rate was increased to a 24-year high of 4.65% in 2023, but this rate dropped to 4.4% in March 2024. The odds of winning are 21,000 to 1 for every Bond.
The problem is that your return entirely comes down to how lucky you are. If you are particularly fortunate, then you might win a couple of prizes and find that your effective return is much higher than the prize rate. However, it’s equally true that you could go years without ever winning a prize, meaning you don’t get any return at all from the money kept in Premium Bonds.
But Premium Bonds aren't the only product on offer if you’re hoping to win a prize from your savings pot. Here’s what you need to know about Premium Bond alternatives.
NS&I Premium Bond alternatives
Halifax Savers Prize Draw
One Premium Bonds alternative comes from Halifax, in the form of its Halifax Savers Prize Draw.
Qualifying savers are entered into a monthly draw, with 1,603 walking away with a cash prize. The top three winners bag £100,000 each, followed by 100 prizes of £1,000 and 1,500 prizes of £100.
To qualify, you will need to hold £5,000 or more in qualifying accounts for a whole calendar month. These include all Halifax savings and ISA deals, excluding accounts for children, as well as most Bank of Scotland branded savings accounts.
The £5,000 can be made up of money in different accounts, rather than all in a single savings account. You will then need to register for entry into the draw, which you can do through the Halifax app or mobile banking service.
If you win, your prize will be paid directly into your Halifax savings account.
The added selling point to the Halifax Savers Prize Draw is that any prize you win is a bonus on top of the interest you’re already earning through your savings account. Even if your luck deserts you and you never win a prize, you will at least still have the interest paid on your account.
Of course, the draw isn’t a good reason on its own to save with Halifax. It should be viewed as an added perk, should Halifax’s accounts already offer the sort of return you’re looking for.
It could be a great option for you if you’re keen on having some form of guaranteed return but are still incentivised by the idea of winning big. Remember, you don’t get any form of guaranteed interest with NS&I’s Premium Bonds.
Chip Prize Savings Account
Chip is an app that allows you to invest and save money automatically, selecting the right assets and accounts for you. The idea is that this saves you time, so you don’t have to go to the effort of researching the market yourself.
It now offers a Prize Savings Account, with every £10 you deposit into your account worth one entry into the prize draw, so long as you have at least £100 deposited by the end of the month.
One saver each month will win the £10,000 top prize, while there are also 50 prizes worth £100, 100 prizes of £50, 500 prizes of £25 and 4,250 prizes of £10 dished out. The prize is then added to your account if you win. As with NS&I’s Premium Bonds, there’s no guaranteed return.
Credit Union PrizeSaver
The PrizeSaver draw is managed by the Association of British Credit Unions and is open to people saving in PrizeSaver accounts with their local credit union.
Savers are entered into a monthly draw, which takes place on the 15th of each month. Every £1 held in a PrizeSaver account gets one entry into the monthly prize draw, capped at up to £200. One winner will receive the top prize of £5,000, then there are 10 £50 prizes up for grabs and 10 £20 prizes. There are currently 17 participating credit unions, and they have paid out more than £150,000 to its members.
Nationwide Start To Save
As the name suggests, Nationwide Building Society’s Start to Save account is aimed at people looking to get started by putting some money aside each month. Not only do you earn interest on the money you save, but you are also entered into a prize draw that takes place quarterly.
However, Nationwide has changed the eligibility and is no longer taking on new account holders. So you must be an existing Nationwide account holder. To qualify, you will need to pay between £25 and £50 into the account in each of the six calendar months leading up to the prize draw. Winners will bag a £250 cash prize.
The number of winners will vary based on how many savers qualify for the draw. Nationwide explains that the prize fund for each draw is equal to 2.5% of the total increase in balances of all the qualifying accounts for that draw. As a result, depending on how big the prize fund is, your chances of winning range from one in 34 to one in 67.
Natwest Round Ups
One of the latest Premium Bonds alternatives comes from NatWest Round Ups. When you spend with your debit card, the purchase is rounded up to the nearest pound, with the change then deposited into a savings account.
The idea is to get you saving without really noticing, and by using the feature you are entered into a prize draw. To be eligible, you will need a Natwest current account, a Natwest instant access savings account and you will need to register for the NatWest Mobile App.
Currently, there are no prize draws running. But when they do come back, you will need to have your Round Ups feature switched on to be automatically entered.
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