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Premium bond winners in July – should this be your last draw?
The prize fund rate will drop to 3.6% from August
Two lucky premium bond holders have each won £1m in July's National Savings & Investments (NS&I) prize draw.
The jackpot winners are from Norwich and Nottingham, while 80 other winners were picked for the next-best prize of £100,000.
Next month, the prize fund rate will be cut from 3.8% to 3.6%. So, would you be better off saving elsewhere? We take a closer look.
July's premium bond winners
The first winning bond (224LR913240) was bought by a lucky winner living in Norwich and is part of a total holding of £50,000. The winning bond was bought in June 2014.
The second winner, from Nottingham, bought their bond (083EP714276) in October 1997. They have a total holding of £49,100.
- Find out more: premium bonds explained.
How many winners were drawn in July?
There were 5,995,712 premium bond prizes paid out in the July draw. Of these, 5,925,935 were worth £100 or less.
In total, this month's prizes were worth £417,701,175.
| Value of prize | Number of prizes |
|---|---|
| £1,000,000 | 2 |
| £100,000 | 80 |
| £50,000 | 158 |
| £25,000 | 318 |
| £10,000 | 797 |
| £5,000 | 1,590 |
| £1,000 | 16,708 |
Source: NS&I.
What's happening to the prize fund rate?
NS&I is cutting the premium bond prize fund rate from 3.8% to 3.6% in August 2025 – the lowest it's been for more than two years.
The lower rate means the total value of premium bonds prizes will fall from £417,701,175 to an estimated £396,738,700.
Despite the rate cut, the chances of winning from August's draw and beyond will remain the same at 22,000 to 1.
While there will still be two jackpot winners, premium bond holders hoping to win another higher-value prize will be disappointed, as the number of prizes worth £100,000, £50,000, £25,000, £10,000 and £5,000 will drop by an estimated 154.
The total number of lower-value prizes worth between £50 and £1,000 is also estimated to go down by 348,252, but the smallest £25 prizes will be boosted by 363,889.
If you're considering investing in premium bonds now in the hope that you can take advantage of the current higher prize fund rate, you're out of luck. That's because premium bonds are only eligible for the draw once they've been held for one full calendar month and won't be entered until August when the new lower rate kicks in anyway.
Why has the prize rate fallen?
The 0.2 percentage point drop to 3.6% from next month's draw isn't entirely unexpected.
Savings rates across the market have been steadily falling since the Bank of England began cutting the base rate last summer, and NS&I has cut the prize fund rate three times since then. The last base rate reduction was in May, so it was only a matter of time before NS&I responded with another prize fund rate cut.
With the base rate likely to be cut again over the next year, it's unlikely this will be the last time the rate falls.
Andrew Westhead, NS&I retail director, says the new premium bond prize find rate 'reflects the changing landscape for savings'.
He adds: 'By making this adjustment now, we’re able to continue to balance the interests of savers, taxpayers and the stability of the broader financial services sector.'
- Find out more: what's happening to the base rate?
Is it time to ditch your bonds?
Sarah Coles, head of personal finance at Hargreaves Lansdown, explains that bigger prizes will see the deepest cuts to keep the chances of a win the same.
Even then, she says, the average bond holder will win nothing in the average month. Savers might want to consider ditching their bonds and putting their money into a savings account or a tax-free cash Isa that offers guaranteed returns.
This table shows the top rates for fixed-term and instant-access cash Isas and savings accounts, ordered by term.
| Instant access | Cahoot | 5% (a) | 61% | £1 | Internet | Monthly, yearly |
| Instant access cash Isa | Chip | 5% | n/a | £1 | Mobile app | Monthly |
| One-year fixed rate | Cynergy Bank | 4.55% | n/a | £1,000 | Internet | On maturity |
| One-year fixed rate cash Isa | Cynergy Bank | 4.35% | n/a | £500 | Internet | Anniversary |
| Two-year fixed rate | Cynergy Bank | 4.45% | n/a | £1,000 | Internet | Yearly |
| Two-year fixed rate cash Isa | Marsden Building Society | 4.3% | n/a | £5,000 | Internet | Yearly |
| Three-year fixed rate | Cynergy Bank | 4.45% | n/a | £1,000 | Internet | Yearly |
Table notes: rates sourced from Moneyfacts on 30 June 2025. Provider customer score is based on savers' overall satisfaction with the brand and how likely they are to recommend it to others. n/a means sample size was too small for us to generate a provider score. (a) 5% AER on balances up to £3,000
All the top deals offer interest rates higher than the current Consumer Price Index (CPI) rate of inflation of 3.5%. It's important to choose an account with a rate above the current CPI figure, as anything below that means your savings will effectively lose value over time.
But if you have a large lump sum to invest and you don't need access to your cash in a hurry, you might want to consider locking your money away in a fixed-term account.
That's because the rates available right now may not hang around for long. Fixing will guarantee you the same interest rate for the period of the bond, whereas providers can adjust interest on a variable rate account, such as an instant access account, at any time.
- Find out more: best savings accounts 2025.
What about NS&I savings?
NS&I does offer a range of savings and Isa accounts. This table shows rates on all adult NS&I savings accounts and Isas.
| NS&I account | AER | Gross |
|---|---|---|
| Guaranteed Income Bonds (British Savings Bonds), one-year/two-year/three-year/five-year fixed* | 4.05%/4%/4.1%/4.06% | 3.98%/3.93%/4.03%/3.99% |
| Guaranteed Growth Bonds (British Savings Bonds), one-year/two-year/three-year/five-year fixed | 4.05%/4%/4.1%/4.06% | 4.05%/4%/4.1%/4.06% |
| Green Savings Bond, three-year fixed | 2.95% | 2.95% |
| Direct Saver, instant-access | 3.3% | 3.3% |
| Income Bonds, instant-access* | 3.3% | 3.26% |
| Direct Isa, instant-access | 3.5% | n/a |
Source: NS&I. Rates correct as of 1 July 2025. *Interest is paid monthly at the gross rate, directly into the customer's nominated bank account. n/a means there's no gross rate available.
As you can see, all top rates are lower than those offered by competitors.
In the case of the one-year Growth and Income Bonds, the rate of 4.05% AER is also slightly below July's average of 4.03%, according to Moneyfacts data. As is the three-year Green Savings Bond's rate of 2.95% AER, which is some way off the current average rate of 3.91% for a fixed bond lasting more than a year.
Savers choosing to open an account with NS&I are therefore missing out on potentially hundreds of pounds worth of interest. For example, the current market-leading one-year fixed rate account pays 4.55%. For someone saving £25,000 in NS&I's Guaranteed Growth Bonds paying 4.05% AER annually, that adds up to £130 less interest over the year.
Rates on NS&I's instant-access products are also lower than the current 3.5% rate of inflation.
Returns may be worse than elsewhere, but the main advantage of NS&I is that funds are backed by HM Treasury, so your money has 100% security.
With other banks and building societies, you’re covered by the Financial Services Compensation Scheme (FSCS), but only up to £85,000 per person, per institution (meaning some brands share protection).
With NS&I, you’re fully protected up to the maximum deposit limit on the account – for the Direct Saver, that’s up to £2m.
- Find out more: NS&I explained.
What's the difference between gross and AER?
Like many providers, NS&I lists rates using the terms gross and AER. The former is best understood as the flat rate of interest that's actually paid, while the latter takes into account the effect of compounding – the snowball effect of income earned from interest growing together with your original investment.
Understanding the difference between gross and AER matters when it comes to Income Bonds. Because returns are paid out into your nominated bank account every month, interest isn't compounded.
The lower gross rate that NS&I quotes for those products is therefore a more accurate reflection of the amount of savings income earned over the course of a year.
NS&I is unusual in formally separating its fixed-term bonds by how they pay out. With most providers, it’s the same account and you make the decision of how interest will be paid when you apply. When choosing, consider whether you really need interest paid out and whether it’s worth it.
