Premium bonds are one of the UK’s most popular savings products, with the tantalising chance of winning £1 million – but the NS&I isn’t the only provider where you could strike it lucky.
Currently, the odds of winning any prize for premium bonds are 1 in 24,500. While the odds of taking home the million-pound jackpot are a tiny 1 in 34bn. So, how do other prize-draw accounts compare?
Which? looks at premium bonds alternatives on the market and whether the odds are in your favour.
How do premium bond prizes work?
Every premium bond you hold has an equal chance of winning a prize, so the more you buy, the better your odds. If you hold £10,000 or more in premium bonds, your chances of winning at least one prize over 12 months are 99.99%.
However, up to 90% of the 3m prizes given out by the NS&I each month are for less than £500. So even if you’re lucky enough to win consistently, you may see relatively modest returns.
The NS&I estimates that a person with average luck will earn around 1.4% on their investment.
You can find out more in our guide to premium bonds.
Alternatives to premium bonds
While premium bonds remain popular, there are a number of other savings products on the market that offer prizes.
This table summarises the accounts that offer a chance to win on your savings. Scroll down to learn more about each option.
|Account||AER||Maximum prize||Total number of prizes||Frequency||Number of entries||Odds of winning|
|NS&I Premium bonds||Nil||£1m||More than 3m||Monthly||1 per £1 bond||24,500 to 1|
|Halifax Savers prize draw*||Depends on account||£100,000 (superdraw: £500,000)||1,603 (superdraw: 1,605)||Monthly||1 per customer||n/a|
|Family BS Windfall bond||Varies in line with base rate||£50,000||13||Monthly||1 per £10k bond||64 to 1 in a year|
|Virgin Money Regular e-saver||2.25%||Virgin Holiday||Variable||Quarterly||1 per customer||n/a|
|Virgin Money Man Utd
Red Devil Saver
|0.5%||Manchester Utd hospitality tickets||Variable||Monthly||1 per customer||n/a|
Source: provider websites, Which? Money Compare
*Links to representative Halifax account
But while the opportunity to win big may be eye-catching, regular savings accounts, Isas or fixed-rate bonds may offer a better interest rate.
Choosing an account with a guaranteed interest rate will lock in regular returns, meaning you can better plan your finances. So weigh up carefully which type of account is right for you.
- Looking for a new savings account? Compare deals at Which? MoneyCompare
Halifax May 2018 superdraw
The Halifax Savers Prize Draw hands out cash each month to winning Halifax and Bank of Scotland customers – and next month, two will take home £500,000.
Generally, the top prize in the Halifax draw is £100,000, which is allocated to three winners. Another 100 winners receive £1,000, while 1,500 receive £100.
But in some months, known as ‘superdraws’, two additional top prizes of £500,000 are handed out. The next superdraw is May 2018, so you have another 11 days to register.
The prize draw is open to anyone aged over 18 who holds a retail-branded Halifax or Bank of Scotland savings account. You need to register to take part, and keep a total balance of more than £5,000 in your account for the whole calendar month before each draw.
Each customer gets one entry, so your odds are the same no matter what your balance is. Around 1,603 prizes are awarded each month, but Halifax has not shared the exact odds of winning.
- Find out more: how to find the best savings account
Family Building Society Windfall bond
If you invest in a Windfall bond, you’re automatically entered into a prize draw each month. One entrant will be awarded £50,000, while another two win £10,000 and 10 more win £1,000.
At the same time, your investment will earn interest at the Bank of England base rate, which is currently 0.5%. Interest is calculated annually and paid into a separate account.
Each bond – worth £10,000 – has an equal chance, with the odds of winning a prize at 64/1 over the first 12 draws.
To earn a bond, you need to invest exactly £10,000. Withdrawal is not permitted, though you can close the account with 35 days’ notice.
Virgin Money Regular e-saver
The Virgin Money e-saver offers interest at a fixed rate of 2.25%, but you’re also entered into a quarterly prize draw.
Each draw hands out a range of rewards, including a holiday from Virgin Holidays, vouchers for Virgin Experience days or cases of Virgin Wine.
Account holders will automatically gain 10 entries into the prize draw, and you can earn up to 10 additional entries for each month you make a deposit.
But if you want to enter this prize draw, you have to move fast. The account will be withdrawn on 30 June 2018, with the last draw held shortly after.
Deposits are capped at £250 per calendar month, but you can withdraw your money at any time.
- Find out more: bank accounts for savers
Virgin Money Man Utd Red Devil Saver
For Manchester United fans, Virgin Money offers accounts that hand out team prizes, including match-day tickets, official Man Utd replica shirts and hospitality tickets.
You’ll earn 10 entries for every month your account is open, and an extra entry for every £50 in your account.
You can access your money whenever you need it, provided the account has at least £1 deposited.
But be aware at this account pays just 0.5% AER interest.
For fans under 16 years old, Virgin also offers the Fred the Red Young Saver, which pays a more robust 2% AER.
Are prize-draw accounts better than the lottery?
The National Lottery offers truly eye-watering sums of money, with last night’s Lotto offering a jackpot of £6.3m.
The odds of winning any prize in Lotto are 9.3 to 1. But the odds of taking home a jackpot are tiny, at just 1 in 45 million.
To participate in the lottery you have to buy a ticket, so if you don’t win, you lose the money altogether.
By contrast, prize-draw savings funds and premium bonds allow you to keep the money you pay in – meaning even if you’re not a winner, you’re not left worse off.
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