We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.


When you click on a retailer link on our site, we may earn affiliate commission to help fund our not-for-profit mission.Find out more.

27 Oct 2019

Premium bonds alternatives: should you 'save to win' with a credit union?

You could win up to £5,000 each month by saving £1

Savers putting away as little as £1 could be entered into a monthly £5,000 prize with a new Treasury-backed credit union scheme.

The Treasury has teamed up with 15 credit unions across the country to offer the PrizeSaver account.

But with other prize-based savings accounts available, including the immensely popular premium bonds scheme, how does this stack up?

Be more money savvy

Get a firmer grip on your finances with the expert tips in our Money newsletter – it's free weekly.

Email address (required)

This newsletter delivers free money-related content, along with other information about Which? Group products and services. Unsubscribe whenever you want. Your data will be processed in accordance with our Privacy policy

Credit unions have more than 2m UK members. These member-led non-profit community organisations offer savings and loans, and in some cases current accounts, mortgages and prepaid cards.

Anyone who deposits at least £1 in a PrizeSaver account at a participating credit union will be entered into a monthly prize draw. Every pound you deposit will give you one entry into the draw, up to a maximum of 200.

While you can deposit more than £200 into your account, you won't get any additional entries. Your entries will remain valid month-to-month, though some credit unions do require a minimum monthly deposit.

The top prize is £5,000, followed by 20 runner-up prizes of £20, across all PrizeSaver account holders. The first draw will take place on 16 December, so you have just under two months to take part.

Which credit unions offer PrizeSaver accounts?

A relatively small number of credit unions - 15 of more than 500 in the country - have agreed to participate in the PrizeSaver pilot. Indeed, some of the country's biggest credit unions, such as Glasgow Credit Union and Manchester Credit Union, are not taking part.

The participating credit unions are:

  • 1st Alliance Credit Union
  • Bradford District Credit Union
  • Central Liverpool Credit Union
  • Clockwise Credit Union
  • Commsave Credit Union
  • East Sussex Credit Union
  • Merthyr Tydfil Borough Credit Union
  • Nottingham Credit Union
  • Plane Saver Credit Union
  • Police Credit Union
  • Riverside Credit Union
  • South Manchester Credit Union
  • Westcountry Savings and Loans

Lewisham Plus Credit Union and London Capital Credit Union are also taking part, but their PrizeSaver accounts are not yet available.

What are the odds of winning?

Since there's no way of knowing how many people will take out a PrizeSaver account, it's impossible to say how likely you are to win.

The Treasury told Which? it plans to publish data relating to the number of PrizeSaver accounts during this pilot at some point in the future.

As this is a pilot, details about it could change, including the prize amount, though the Treasury has promised the grand prize will never be lower than £5,000.

The pilot will run until March 2021, when the Treasury will assess its success and decide whether to roll it out more widely.

How does PrizeSaver compare to premium bonds?

The most obvious alternative to the PrizeSaver scheme is NS&I premium bonds.

As with PrizeSaver accounts, each £1 you save with premium bonds counts as a 'ticket' and enters you into a monthly prize draw.

There are a few major differences, though.

Firstly, the upper limit for investing in premium bonds is £50,000, meaning you can have 50,000 entries instead of just 200. Then again, the minimum deposit is £25.

If you have a modest deposit, you'll have better odds against people with more to spend in the credit union draw.

The prizes themselves are also bigger. The top prize is £1m, and there are two of these up for grabs each month. There are also millions of other prizes each month, ranging from £25 to £100,000.

Currently, each £1 bond has a 24,500 to 1 chance of winning a prize. The odds of winning the £1m jackpot, however, are 34bn to 1.

On the other hand, when you buy premium bonds the only way to see your investment grow is to win prizes. Your money will not earn interest.

Some credit unions, by contrast, pay interest on your savings, while others will offers dividends to members - meaning your money will grow, whether you win or not.

What are the alternatives?

Premium bonds remain the UK's most popular savings products, but there are a number of others that also offer prizes.

The table below has a breakdown of some of your other options.

Keep in mind that while the chance to win a prize might be exciting, other types of savings accounts are likely to offer the best interest rates.

You'll be able to better plan your finances if you choose an account with a guaranteed interest rate, rather than a potential prize, so make sure you think carefully about which kind of account suits you best.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.