what are NS&i Premium bonds

Premium Bonds are a savings product from National Savings & Investments (NS&I).
They are a government-backed institution, which means your money is 100% secure.
Instead of earning regular interest like a savings account, each £1 bond you hold is entered into a monthly prize draw where you could win between £25 and £1 million, completely tax-free.
You can buy Premium Bonds in units of £25, up to a maximum of £50,000 per person.
Your money stays safe, and you can cash it in anytime with no penalties.

how NS&i Premium bonds work

Buy your bonds: Minimum purchase is £25.
Get your numbers: Each £1 bond receives its own unique number.
Monthly prize draw: On the second working day of each month, NS&I randomly selects the winning bond numbers.
Check your winnings: You can check online, through the NS&I prize checker app, or have any prizes paid directly into your bank account.
Withdraw anytime: You can cash in your bonds whenever you like, no fees, no penalties. Withdrawing can take up to 3 days.

Why Are Premium Bonds So Popular?

Government-backed safety: NS&I is backed by HM Treasury, so your money is completely protected.
Tax-free cash prizes: All winnings are free from income tax.
Fun and flexible: It’s like a lottery where you never lose your ticket as your savings stay intact.
Easy access: You can withdraw your money anytime without charges.

pros & cons of premium bonds

Pros of Premium Bonds
Zero risk to your capital (government-backed).
All prizes are 100% tax-free.
Chance to win up to £1 million with no gambling losses.

Cons of Premium Bonds
No guaranteed returns: you might win nothing for months.
The prize rate (around 4.4% as of 2025) is an average, most savers earn less than this.
Large prizes are rare; the majority of wins are £25.
Inflation can reduce the real value of your savings over time.

How the Prize Structure Works

Each £1 bond has a unique number.
NS&I’s random number generator, ERNIE (Electronic Random Number Indicator Equipment), picks the winners.
Prizes range from £25 to £1,000,000.
You can hold up to £50,000 worth of bonds, giving you 50,000 chances every month.
The more bonds you own, the better your odds but luck still plays the biggest role.

Buying & Managing Your Bonds

Currently, you can’t buy Premium Bonds through an app.
Purchases and withdrawals are made directly through the official NS&I website: www.nsandi.com/premium-bonds

However, NS&I does offer a Prize Checker App, available for both iOS and Android, which lets you:
Check if you’ve won any prizes.
See the value of your winnings.
Review past results from previous draws.
You can also set your prizes to be paid automatically into your bank or reinvested into more bonds.

Fun Facts About Premium Bonds

Launched in 1956 to encourage saving in post-war Britain.
Over 24 million people now hold Premium Bonds in the UK.
The top prize of £1 million is awarded twice each month.
Even old bonds remain in the draw, you could win years after buying them.
ERNIE, the machine that picks winners, has evolved from a room-sized computer to modern cloud-based software!

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important Disclaimer

The information on this page is provided for general educational purposes only and does not constitute financial advice or a recommendation. You should always check details directly with NS&I and consider speaking to a regulated financial adviser before making any financial decisions.