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1 Sep 2020

Premium bond winners September: are bonds a safe bet during a recession?

Find out whether premium bonds are the best home for your savings

Two lucky premium bond holders have pocketed a £1m jackpot prize in NS&I's premium bonds September prize draw.

The windfalls went to savers in Wales and southern Scotland, while seven other winners received £100,000.

Here, Which? reveals the winning bond numbers and looks at whether buying premium bonds is a good idea during a recession.

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September 2020 premium bond winners

The first winner of September's prize draw is a man from Wales, who won with the bond number 250SL107433. He purchased the winning number in July 2015 and has £17,745 in premium bonds.

The second winner is a woman from southern Scotland, who secured £1m with the bond number 093XD777211. The winning bond was purchased in March 2003 and forms part of a £10,000 total pot.

How many winners were drawn in September?

There were 3,856,040 prizes given out in the September draw, worth a total of £110,218,450. Of these, 3,846,962 prizes were worth £100 or less.

The table below shows the full breakdown of prizes:

Value of prizeNumber of prizes
£1,000,0002
£100,0007
£50,00014
£25,00028
£10,00071
£5,000140
£1,0002,204

Are premium bonds a good idea during a recession?

The UK officially entered a recession in August, as official figures revealed GDP contracted for the second consecutive quarter, by 20.4% between April and June.

People who have money invested in stocks and shares may have seen a fall in the value of their pot, but premium bonds pose no risk to your capital - the money you put in is 100% Treasury backed, meaning it's completely safe.

The annual prize fund interest rate rose to 1.4% in December 2017, but premium bonds don't actually pay any interest on the money you save.

Instead, 1.4% indicates that for every £100 saved in premium bonds, £1.40 is paid out in prizes. Your chances of winning a prize are around 24,500 to 1.

What else can I do with my savings?

It's worth bearing in mind that with products such as premium bonds, your money could be eroded by inflation over the years if you don't win.

Savings accounts, which offer a guaranteed rate, will give you more certainty that you can beat inflation.

Unfortunately, for an easy-access account the highest interest you'll get is 1.16% through NS&I's Income Bonds - just beating inflation at 1.1% (CPI).

If you're willing to take on more risk, investing could be a good option for you.

Generally, the potential for gains by investing can be far higher than premium bonds, unless you win big.

This is because while investments can be eroded in times of economic downturn, there's also much more potential for gains.

Before investing, consider your appetite to risk and be prepared to invest for at least five years to ride out any market falls.

You can find out beginner's guide here.

The Which? Money podcast: are premium bonds worth it?

Last July, our experts on the Which? Money podcast debated whether premium bonds were really worth investing in.

You can listen to the episode below, or check it out on Apple Podcasts or Spotify.