Premium Bonds Calculator
Estimate your expected Premium Bonds prize winnings, probability of at least one prize per month, and the equivalent interest rate. Based on the current NS&I prize fund rate of 3.30% (April 2026) with odds of 1 in 23,000 per bond.
Reviewed by Richard Ross · Last updated April 2026
How Premium Bonds Calculator works
How Premium Bonds work
NS&I holds a monthly prize draw. Each £1 bond gives you one entry per month. Prizes range from £25 to £1 million. All prizes are tax-free. There is no interest — prizes are your return. The prize fund rate (equivalent AER) is set by NS&I and changes periodically.
Expected value and worked example
The expected annual prize winnings = Holding × Prize Fund Rate. At 3.30% on £10,000: £330 expected per year, or about £27.50 per month. On £50,000 (the maximum): £1,650 expected per year. However, actual winnings vary widely — you could win much more or nothing at all in a given period. With £10,000 held, you have roughly a 35% chance of winning at least one £25 prize each month. With the maximum £50,000, the monthly win probability rises to approximately 89%.
Premium Bonds vs savings accounts
For basic-rate taxpayers with savings under their £1,000 Personal Savings Allowance (PSA), a taxable savings account at the same or higher rate beats Premium Bonds because the returns are guaranteed rather than probabilistic. For higher-rate taxpayers (PSA of £500) and additional rate taxpayers (no PSA), the tax-free prize fund is more competitive — 4.40% tax-free is equivalent to 7.33% gross for a 40% taxpayer, or 8.00% gross for a 45% taxpayer. For those with large holdings, the £85,000 FSCS limit does not apply — NS&I is backed by HM Treasury with no upper limit.
NS&I and government-backed savings in the UK
Premium Bonds are issued by NS&I (National Savings and Investments), a government-backed savings institution owned by HM Treasury. Unlike bank deposits, NS&I savings are 100% protected with no upper limit — your capital is guaranteed regardless of the amount held. The maximum Premium Bonds holding per person is £50,000. Bonds must be held for at least one full calendar month before they are eligible to enter the prize draw. Bonds can be cashed in at any time, with funds typically returned within 3 working days.
Who benefits most from Premium Bonds?
Premium Bonds are most valuable for higher-rate and additional-rate taxpayers, who face 40–45% tax on savings interest above their reduced PSA (£500 and £0 respectively). The tax-free prize fund of 4.40% (April 2025) is effectively worth 7.3% gross for a 40% taxpayer — beating most fixed-rate bonds. They also suit people with savings above £85,000 who want 100% capital protection without splitting funds across providers. Basic-rate taxpayers within their £1,000 PSA typically get better guaranteed returns from a competitive savings account or ISA. Basic-rate taxpayers who have not used their £1,000 Personal Savings Allowance will generally get better guaranteed returns from a competitive easy-access or fixed-rate savings account at the same or higher rate. Premium Bonds make most sense once your PSA is used, your savings exceed £85,000 (where FSCS protection limits become relevant), or you are a higher or additional rate taxpayer.
Prize distribution and odds
NS&I distributes prizes in a deliberately skewed structure: there are two £1 million jackpots per month, but the vast majority of prizes are at the £25 minimum level. This means most holders will win frequent small prizes rather than rare large ones. The expected value calculation is the same regardless of prize distribution — but the experience of holding Premium Bonds is closer to receiving occasional small bonuses than earning predictable interest. Sources: NS&I — Premium Bonds prize draw (nsandi.com).
Frequently asked questions
What is the Premium Bonds prize rate?
As of April 2026, the prize fund rate is 3.30% tax-free (equivalent AER). The odds of any one bond winning in a month are 1 in 23,000. NS&I adjusts the rate periodically in line with interest rate changes.
Are Premium Bonds better than a savings account?
It depends on your tax position and luck. The expected value is equal to the prize fund rate. For basic-rate taxpayers within their PSA, a savings account at the same rate gives a guaranteed equivalent return. For higher-rate taxpayers or those with very large sums, the tax-free element can make Premium Bonds more attractive.
What is the maximum Premium Bonds holding?
£50,000 per person. The minimum purchase is £25. Bonds are registered in your name and are protected without limit by HM Treasury (NS&I is a government-backed institution).
How long does it take to win on Premium Bonds?
Based on probability, a £1,000 holding has roughly a 4.8% chance of winning each month (about 1 win per 21 months). A £10,000 holding has ~38% chance each month. Chance-based — some people win frequently, others less often.
How do I buy Premium Bonds?
Premium Bonds are bought directly from NS&I at nsandi.com or via the NS&I app. You can purchase in multiples of £1, with a minimum of £25. Payments are accepted by bank transfer, debit card, or standing order. Bonds are registered to you by name and National Insurance number — there is no physical certificate.
What happens to Premium Bonds when the holder dies?
Premium Bonds continue to be entered into the prize draw for up to 12 months after the holder's death, or until they are cashed in, whichever comes first. The executor or administrator of the estate can claim any prizes won during this period. After 12 months, bonds are removed from the draw. NS&I should be notified as soon as practicably possible after bereavement.
Are Premium Bonds tax-free?
Yes. All Premium Bonds prizes are completely tax-free. They do not count towards your Personal Savings Allowance, do not need to be reported on your Self Assessment return, and are not subject to income tax or capital gains tax. This makes them particularly attractive for higher-rate taxpayers who have used their PSA.
How much are Premium Bonds worth as a gross interest rate?
The 3.30% tax-free prize fund rate is equivalent to: 4.13% gross for a basic rate taxpayer (20%), 5.50% gross for a higher rate taxpayer (40%), and 6.00% gross for an additional rate taxpayer (45%). These equivalent rates assume you have already used your Personal Savings Allowance. If you are within your PSA, a standard savings account may offer better guaranteed returns.
Can I hold Premium Bonds for a child?
Yes. Premium Bonds can be bought for children under 16 by a parent or guardian. The bonds are held in the child's name with the parent/guardian as the nominated contact. The child can manage their own bonds from age 16. Each child has their own £50,000 maximum, separate from any parent's holding.
How often does the Premium Bonds prize fund rate change?
NS&I reviews the prize fund rate periodically, typically in response to changes in the Bank of England base rate. Recent changes: the rate rose to 4.65% during 2023, fell to 4.40% in February 2025, then to 3.60%, and then to 3.30% in April 2026. NS&I aims to balance competitiveness with its obligation not to over-compete with commercial banks.