What are Premium Bonds?

Premium Bonds are the UK’s largest savings product, attracting more than 22 million savers who have collectively invested over £121 billion in them. These investment products are issued by National Savings and Investment↗︎ (NS&I), offering a unique approach to saving and potentially winning tax-free cash prizes.

Unlike traditional investments that provide regular interest or dividends, Premium Bonds offer participants an opportunity to enter a monthly prize draw. By investing a minimum of £25, you receive a bond number for every pound invested. For instance, saving £100 would entitle you to 100 bond numbers, each with the potential to win a prize.

The prize draw takes place monthly, and the amounts rewarded range from £25 to a substantial £1 million, all of which are tax-free. This tax exemption adds to the appeal of Premium Bonds as it means you keep the full prize amount without any deductions.

If you wish to continue investing, you can purchase more bonds until you reach the maximum holding level of £50,000. This offers flexibility for those who want to increase their chances of winning.

Premium Bonds are not limited to individual investors. Parents, guardians, grandparents, or great-grandparents can buy them on behalf of a child under 16 years old, presenting an excellent gift opportunity.

Are Premium Bonds the right choice for you?

If you are seeking the thrill of a lottery-like opportunity to win cash prizes and want to avoid paying taxes on any potential winnings, Premium Bonds may suit you. Additionally, if you have at least £25 to invest, this savings product provides a chance to grow your money in a unique way.

However, Premium Bonds may not be the ideal option if you are looking for a regular income stream or guaranteed returns. As with any investment, there are no guaranteed payouts, and the prizes are subject to chance.

Furthermore, if you are concerned about the impact of inflation on your savings and desire steady growth, other investment options might be more suitable for your financial goals.


Premium Bonds offer a compelling alternative to conventional savings products, providing the excitement of a prize draw and the possibility of tax-free cash prizes. For individuals willing to take a chance on their savings, this popular UK investment can be an attractive option.

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