Calculate your expected Premium Bonds prize return and compare it against a savings account or Cash ISA after tax. Shows the equivalent gross rate needed to beat bonds for your tax band.
Last updated: April 2026
Your Premium Bonds details
Minimum: £25. Maximum: £50,000 per person.
Current prize fund rate
Current rate: 4.40% (April 2025). Check NS&I website for latest rate.
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How Premium Bonds prizes work
Premium Bonds are a savings product from NS&I (National Savings and Investments), backed by HM Treasury. Instead of earning interest, your money is entered into a monthly prize draw. Prizes range from £25 to £1,000,000 (two jackpots per month). All prizes are completely tax-free regardless of how much you win and regardless of your income tax rate. The "annual prize fund rate" is the equivalent annual return if you won prizes exactly in line with statistical expectation.
The luck factor
The statistical return on Premium Bonds is deterministic in aggregate but highly variable at the individual level. With a £1,000 holding, your expected annual return is around £44 at the current rate - but in practice you may win nothing for months, then win several prizes in the same month, or win nothing at all in a year. With a maximum £50,000 holding, the law of large numbers takes effect more strongly and actual returns tend to be closer to the expected rate. For smaller holdings, the variance is very high and a standard savings account is likely more reliable.
Premium Bonds versus savings accounts
The tax-free nature of Premium Bond prizes makes them most attractive to higher and additional rate taxpayers, who would otherwise pay 40% or 45% on savings interest above their Personal Savings Allowance. For basic rate taxpayers with savings interest within their £1,000 PSA, a savings account or Cash ISA at the same or higher rate is likely to produce a more predictable and comparable return. The comparison shifts in favour of Premium Bonds when the individual exceeds their PSA or pays higher rate tax.
Frequently asked questions
The Personal Savings Allowance (PSA) allows basic rate taxpayers to earn up to £1,000 of savings interest per year tax-free, and higher rate taxpayers up to £500. Additional rate taxpayers have no PSA. Within these limits, a savings account paying the same rate as the Premium Bond prize fund equivalent produces the same after-tax return. The Premium Bonds advantage emerges once your savings interest would exceed your PSA - at which point the tax-free prizes become worth more than the taxable equivalent interest. For someone with significant savings or a higher rate taxpayer, Premium Bonds can be materially more efficient.
NS&I runs a monthly prize draw, usually on the first business day of each month. You can check for prizes online via the NS&I website or app using your holder number and account details. Prizes are also paid automatically if you have provided a bank account. Unclaimed prizes are held by NS&I indefinitely - if you have inherited Premium Bonds or have old ones you have forgotten about, the NS&I prize checker will tell you of any unclaimed prizes. You can also register for email or text alerts when prizes are credited.
Yes. Premium Bonds are backed by HM Treasury - they are effectively the safest savings product available in the UK, with no limit on the government guarantee (unlike the £85,000 FSCS limit per institution that applies to bank deposits). Your capital is 100% protected and can be withdrawn in full at any time, typically within 3–5 working days. The only risk is the opportunity cost of earning less than a comparable savings account - the capital itself is never at risk.