Premium Bonds alternatives that turn savings into winnings

Still waiting on Agent Million to knock on your door? Consider these Premium Bonds alternatives for your portfolio.

gold coins falling on two hands
What are the best Premium Bonds alternatives? (image: Getty Images)
(Image credit: Getty Images)

National Savings & Investments (NS&I) is one of the UK’s best-known financial brands, particularly for its popular Premium Bonds prizes. If you're part of the savings scheme, you should check to see if you're a winner following February's prize draw. But, even if you're a big fan, did you know there are a number of Premium Bonds alternatives that could be more lucrative?

Savers who are keeping their money in Premium Bonds are set to see their chances of landing a big prize diminish slightly. The prize fund rate is dropping from 4.65% to 4.4% in March.

In contrast, the best savings accounts have been lowering their rates as a result of a halt on interest rates at 5.25%. So the allure of potentially becoming a millionaire has kept Premium Bonds as a staple of many savers’ portfolios.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Each bond held in Premium Bonds is entered into a monthly draw, with millions of prizes available. 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 

NS&I Premium Bonds

Let’s first look at the kingpin of prize draw-based savings - NS&I’s Premium Bonds. 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 prizes vary in size from £25 to a cool £1 million. In the February 2024 prize draw, a total of 5.8 million prizes worth more than £475 million were paid out.

The big downside to Premium Bonds is that you won’t earn any interest on the money you have saved. 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.

That prize rate was increased to 4.65% in 2023. The odds of winning also rose to 21,000 to 1. But this rate is dropping to 4.4% from March 2024.

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.

Natwest Round Ups

The latest Premium Bonds alternative 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. 

Halifax Savers Prize Draw

Another 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, while there are then 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 on your cash 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, rather than the reason to open a Halifax account.

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, 500 prizes of £50 and £750 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.

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 then 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 of 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.

Credit Union PrizeSaver

The PrizeSaver draw is managed by the Association of British Credit Union 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 get the top prize of £5,000, there are ten £50 prizes up for grabs and ten £20 prizes. There are currently 17 participating credit unions, and they have paid out more than £150,000 to its members.

Tom Higgins

Tom is a journalist and writer with an interest in sustainability, economic policy and pensions, looking into how personal finances can be used to make a positive impact.

He graduated from Goldsmiths, University of London, with a BA in journalism before moving to a financial content agency. 

His work has appeared in titles Investment Week and Money Marketing, as well as social media copy for Reuters and Bloomberg in addition to corporate content for financial giants including Mercer, State Street Global Advisors and the PLSA. He has also written for the  Financial Times Group.

When not working out of the Future’s Cardiff office, Tom can be found exploring the hills and coasts of South Wales but is sometimes east of the border supporting Bristol Rovers.

With contributions from