Premium Bonds: Prize Amounts and How Much You Can Win
Premium Bonds are a unique way to save in the UK, with regular prize draws instead of interest. People across the country buy these bonds with the aim of seeing their numbers selected.
If you’re new to Premium Bonds, you might be curious about how prizes work and what the realistic chances are of picking up a win.
As Premium Bonds are backed by the government, it might be worth understanding how they differ from typical savings products and how prizes are awarded. This guide explains the prize amounts and what that could mean for your potential return. Read on to learn more.
How Much Can You Win On Premium Bonds?
With Premium Bonds, each £1 bond you hold has a chance to win a prize in the monthly draw. The biggest prize available is £1 million, and there are two of these awarded each month.
Other potential prizes include amounts like £100,000, £50,000, £25,000, £10,000, and stepping down to £25. The number of prizes and their values are set by NS&I and can change if the prize fund rate is reviewed. Most prizes given out are on the lower end, such as £25 or £50.
Your odds of winning any prize for each £1 bond are 22,000 to 1 every month. There is no way to know which bond might win, since all draws are random and every eligible bond has the same chance. The more bonds you hold, the more entries you have, but the odds do not improve for any single bond.
What Are The Different Prize Tiers?
Premium Bonds have a range of prize amounts that appear in the monthly draws. Each prize tier is set by NS&I, and which one a bond receives depends entirely on the outcome of the random draw. These tiers are designed so that many smaller prizes are awarded alongside a smaller number of larger sums.
Top Prizes Explained
The highest tier starts with two top prizes of £1 million every month. These are the largest awards on offer, and only two bondholders receive this sum in each draw. Below that sit prizes of £100,000, £50,000, £25,000 and £10,000. These amounts are far rarer than the smaller tiers, which is why most bondholders who win see more modest returns.
Smaller Prize Categories
Smaller prizes make up the majority of Premium Bond wins. These include £5,000, £1,000, £500, £100, £50 and £25 awards. Most people who receive a prize get either £25 or £50. Tens of thousands of these smaller prizes are paid out each month, so while the individual amounts are modest, they account for most of the activity in each draw.
How Are Winners Selected Each Month?
Winners of Premium Bonds are picked using a system known as ERNIE, which stands for Electronic Random Number Indicator Equipment. Each month, ERNIE uses random numbers to match bond numbers with different prize levels, so every eligible bond has the same chance in the draw, no matter when it was bought.
Every Premium Bond has a unique number, and these are the numbers ERNIE selects from when picking winners. The draw is not influenced by how much someone has invested or the age of their bonds. Only bonds that have been held for at least one full calendar month can take part in the following draw.
The whole prize draw process is regularly tested and independently checked for fairness and accuracy. Results are published each month, and you can use NS&I’s tools to see if your bonds have won.
How Do I Check If I’ve Won On Premium Bonds?
If you hold Premium Bonds, finding out if you have won is straightforward. NS&I publishes the results every month as soon as the draw has taken place.
You can use the official NS&I prize checker on their website or through the mobile app. You will need your Premium Bond holder’s number or your NS&I number to look up your results. The tool shows whether any of your bonds have matched a prize, and you can search past draws if you want to review earlier months.
After each draw, NS&I also contacts winners directly. You might receive an email or letter, and some prizes can be added automatically to your account.
Are Winnings Tax-Free In The UK?
If you win a prize through Premium Bonds, the money you receive is tax-free in the UK. You get the full amount without needing to declare it as income. NS&I handles the tax status so nothing extra is required from your side.
This differs from many savings accounts, where interest can be taxable if it goes over your Personal Savings Allowance. With Premium Bonds, every prize from £25 to the top awards is paid in full. For example, if you receive £100 one month and £25 later in the year, both amounts are paid to you without deductions.
Any potential winnings from other activities such as casino play are also generally tax-free for players in the UK, but rules can differ elsewhere. If you are unsure about your situation, it could be a good idea to speak with a financial adviser.
**The information provided in this blog is intended for educational purposes and should not be construed as betting advice or a guarantee of success. Always gamble responsibly.
*All values (Bet Levels, Maximum Wins etc.) mentioned in relation to these games are subject to change at any time. Game features mentioned may not be available in some jurisdictions.
