Two lucky premium bond holders kicked off the New Year with a million pound surprise from the NS&I. But how many premium bonds do you need to hold to improve your odds of winning a prize?
A man from Kent and a woman from Wiltshire have been named as the winners of January’s two £1 million jackpots from the NS&I’s premium bond prize draw.
In December, the odds of winning any prize in a given month went up. Here, we explain how the number of bonds you hold affects your chances of winning, and look into how many bonds previous jackpot winners have held.
£1m jackpot winners in Kent and Wiltshire
Every month, the NS&I awards prizes to premium bond holders drawn at random, including two £1 million pound jackpots.
The man from Kent who won £1m in January had invested around £24,580 in premium bonds, buying his winning bond (number: 112TQ018654) in July 2006. The Wiltshire woman, who bought her winning bond in February 2002 (number: 001TA132848), held a total of £25,103.
Another 2.9 million other prizes were handed out in January, though 90% were worth less than £500.
- Find out more: premium bonds – everything you need to know
£10,000 in bonds improves your odds
For each pound you invest, you get one premium bond, and every bond has an equal chance of winning any prize. So, the more bonds you hold, the more entries you have in the draw, and the better your odds – but only up to a point.
From December, the NS&I raised the prize fund rate to 1.4%, up from 1.15% – meaning a person of average luck is likely to win prizes equating to a 1.4% return on their investment in a given year.
As a result, the odds of any bond winning any prize each month went up to 24,500 to 1 – a significant improvement from 30,000 to 1.
Over the course of a year, a person who holds £100 in premium bonds has a 5% chance of winning a prize. By contrast, a person with £1,000 has a 49% chance of winning in any given year.
By the time you hold £10,000, your odds of winning a prize at least once in the year are virtually 100%.
Don’t grab the champagne just yet, though – your prize might only be £25. On a £10,000 investment, that may work out to just 0.25% interest in the year. And even if the probability of winning is 99.99%, there’s still a possibility you’ll walk away empty-handed.
- Find out more: bank accounts for savers – how to maximise your interest
What are the odds of winning a million?
The odds of winning a jackpot in any given month are extremely small – close to 1 in 34bn for every bond you hold. So, even if you invest the maximum of £50,000 in premium bonds, your odds would be around 1 in 680,000 each month, making it extremely unlikely that you’ll become an instant millionaire.
Over the last five years, the winners of the premium bond jackpot have on average held £25,551. In the same period, three-quarters of jackpot winners have invested more than £15,000.
But some recent winners got lucky with relatively small investments. In January 2015, a woman won the £1 million with just £400 worth of bonds, while in April 2013, one of the winners held just £575.