Big Wins or Risky Savings? Exploring the Pros and Cons for Risk-Averse Savers

A Chance to Win Big

Premium Bonds offer savers the chance to win big prizes every month. With over 24 million participants and more than £127 billion invested, this government-backed savings scheme is a popular choice for many.

Premium Bonds are not like traditional savings accounts that accrue interest. Instead, each £1 invested is entered into a monthly prize draw, with the chance to win prizes ranging from £25 to a life-changing £1 million. Two lucky individuals become millionaires every draw.

The odds of winning may be low, with a 22,000-to-one chance for every £1 invested. However, the scheme offers a risk-free way to save, ensuring your money remains safe.

Money expert Martin Lewis estimates the effective "interest rate" on Premium Bonds to be around 4%, considering all potential winnings. However, it's important to note that most individuals won't see returns close to this. Many traditional savings accounts offer higher and more consistent interest rates.

The distribution of prizes varies each month. For example, in January 2025, the results showed a range of prizes awarded, with the majority being smaller amounts.

To check if you've won a prize, you can visit the NS&I website and enter your bond numbers. Alternatively, the NS&I app allows you to check results on the go.

While Premium Bonds may not be the most lucrative savings option, they offer a unique opportunity to win big and the peace of mind that your money is safe.