Premium Bonds are one of the nation’s much-loved savings products, but they are becoming less attractive as the odds of winning are set to lengthen and the number of prizes on offer are beginning to dwindle.
Offered by National Savings and Investments (NS&I), the products give savers the hope of winning cash prizes every month, ranging from £25 to a top £1 million prize for two jackpot winners who will receive a visit from ‘Agent Million’.
Premium Bonds prizes are tax-efficient, as any winnings you receive are not taxed by HMRC.
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However, the monthly prize draws have become less attractive recently. In August 2025, the prize fund rate fell to just 3.6%, down from 3.8% in July and 4.65% in September 2023. It will drop again in April 2026 to 3.3%.
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This reduces the level of prizes available and will mean the total amount of money distributed among Premium Bonds winners in the April draw will fall to around £375 million, down from around £408 million in the February draw.
NS&I will also lengthen the odds of winning from 22,000 to one to 23,000 to one, per £1 Bond number.
The changes are due to recent Bank of England interest rate cuts and rules that mean the Treasury-backed lender can’t overly compete with the wider savings market.
Recent data obtained by AJ Bell found that around 63% of people who have Premium Bonds have never won a single prize from the monthly prize draws, another reason to consider if the product is right for you.
There are also rivals to Premium Bonds that could be more lucrative.
A number of savings providers have launched prize draw products, with one prize draw offering the chance to win up to £250,000. So, how do they work?
How savings prize draws work
Savings prize draws are easy-access or notice savings accounts, where the money you pay in allows you entry into a prize draw.
Each provider has slightly different eligibility rules, frequency and payout rates for their prize draws. Here are the top Premium Bonds alternatives on offer right now.
Alternatives to Premium Bonds
1. Chip Prize Savings Account – win up to £10,000
The prize pot: Chip is offering an attractive jackpot, with a total of £75,000 up for grabs. The top prize is usually £10,000, but 2,500 additional prizes of £10 are available, and 8,000 prizes of £5 can also be won. Now may be a good time to open an account as the jackpot grand prize for March 2026 has been increased to £250,000. There are also 100 prizes of £1,000, 5,000 £10 prizes and 20,000 £5 prizes available. Chip claims the odds of winning a prize on its account are 3.5 times better than Premium Bonds.
How it works: With Chip’s Prize Savings Account you don’t earn any interest on your deposits, instead the money you deposit counts towards entries in a monthly prize draw. Any prize you win is added to your account.
The number of entries savers get is decided by their average balance over the calendar month. The average balance is calculated by dividing the daily balance by the number of days in the month.
You do not have to pay tax on any prizes you may win.
Eligibility: All savers with the Prize Savings Account are automatically given a number of entries into the prize draw.
2. Family Building Society - win up to £50,000
The prize pot: Family Building Society has a Windfall Bond product that operates a monthly prize draw. New and existing customers can win a jackpot of £50,000 and there are also prizes of £100, £500, £1,000 and £10,000.
How it works: Newly opened Windfall Bonds qualify for the Monthly Free Prize Draw in the second calendar month after the bond has been opened. For example, a Windfall Bond opened in January would be entered into March’s Monthly Free Prize Draw.
The value of prizes to be paid each month is calculated by taking the total value of Windfall Bonds entered into the previous month’s free prize draw, multiplied by 1%/12 (one twelfth of one per cent).
Even if you don’t win a prize, the Windfall Bond pays a rate of 2.75%. Customers can access their money after 35 days’ notice, and you do not need to pay tax on your winnings.
Eligibility: You can open a Windfall Bond online, by post and by visiting Family Building Society’s Epsom branch. Each Windfall Bond requires a £10,000 deposit.
3. Credit Union PrizeSaver - win up to £5,000
The prize pot: The PrizeSaver draw is managed by the Association of British Credit Unions. It is a monthly prize draw with a top prize of £5,000, 10 prizes of £50 and 10 prizes of £20.
How it works: Eligible savers are automatically entered into a monthly draw. Every £1 held in a PrizeSaver account gets you one entry into the monthly prize draw, with up to 200 entries per month.
Eligibility: The draw is open to people saving in PrizeSaver accounts with their local credit union. You can only have one PrizeSaver account.
Note: Not all credit unions in the UK offer a PrizeSaver account. Find out which ones are participating on the PrizeSaver website.
4. TSB ‘Yes Days’ prize draw – win £35,000
The prize pot: TSB is offering two current account holders the chance to win £35,000.
How it works: To be entered into the prize draw, you need an open TSB personal current account and must deposit £2,500 by 2 March 2026 to automatically be entered into the prize draw.
Eligibility: Every £2,500 you deposit before 2 March counts as one entry in the draw and you can make up to 25 entries in total. The funds must originate from outside TSB and you need to be 18 or older to enter. The draw will be made on 3 March 2026.
