Premium Bonds Calculator 2025
Calculate your expected annual winnings from Premium Bonds, your monthly odds of winning any prize, and whether you’d be better off in a Cash ISA or savings account. Based on the current NS&I prize fund rate of 4.40%.
How Premium Bonds work
Premium Bonds are a savings product from NS&I (National Savings and Investments), backed by HM Treasury. Unlike ordinary savings, you don’t earn interest — instead, your money is entered into a monthly prize draw. Each £1 bond has an equal chance of winning in every draw. Prizes range from £25 to £1 million and are completely tax-free.
The prize fund rate — currently 4.40% — determines the total pot of prizes paid out each month. NS&I uses this to set the number of prizes at each tier. The odds of any individual £1 bond winning a prize in a given month are approximately 21,000 to 1.
Prize fund rate: 4.40% · Odds per £1 bond per month: ~21,000 to 1 · Minimum holding: £25 · Maximum holding: £50,000 · Tax on winnings: Nil (all prizes tax-free) · Prizes: £25 up to two £1 million jackpots per month
Premium Bonds vs savings accounts — who wins?
For basic rate taxpayers with savings below the £1,000 Personal Savings Allowance, a good savings account will statistically beat Premium Bonds in the long run — guaranteed interest is worth more than expected lottery-style returns at the same headline rate.
For higher and additional rate taxpayers who’ve exhausted their PSA (£500 and £0 respectively), Premium Bonds have a real advantage: all winnings are completely tax-free regardless of amount, while savings interest above the PSA is taxed at 40–45%. For large holdings in higher tax brackets, the effective after-tax return from bonds can exceed what’s achievable from a taxable account.
A Cash ISA eliminates this tax disadvantage but may pay a slightly lower rate than the best instant-access accounts. The comparison depends heavily on your tax situation and savings rate.
Frequently asked questions
Premium Bonds Calculator 2025
Calculate your expected annual winnings from Premium Bonds, your monthly odds of winning any prize, and whether you’d be better off in a Cash ISA or savings account. Based on the current NS&I prize fund rate of 4.40%.
How Premium Bonds work
Premium Bonds are a savings product from NS&I (National Savings and Investments), backed by HM Treasury. Unlike ordinary savings, you don’t earn interest — instead, your money is entered into a monthly prize draw. Each £1 bond has an equal chance of winning in every draw. Prizes range from £25 to £1 million and are completely tax-free.
The prize fund rate — currently 4.40% — determines the total pot of prizes paid out each month. NS&I uses this to set the number of prizes at each tier. The odds of any individual £1 bond winning a prize in a given month are approximately 21,000 to 1.
Prize fund rate: 4.40% · Odds per £1 bond per month: ~21,000 to 1 · Minimum holding: £25 · Maximum holding: £50,000 · Tax on winnings: Nil (all prizes tax-free) · Prizes: £25 up to two £1 million jackpots per month
Premium Bonds vs savings accounts — who wins?
For basic rate taxpayers with savings below the £1,000 Personal Savings Allowance, a good savings account will statistically beat Premium Bonds in the long run — guaranteed interest is worth more than expected lottery-style returns at the same headline rate.
For higher and additional rate taxpayers who’ve exhausted their PSA (£500 and £0 respectively), Premium Bonds have a real advantage: all winnings are completely tax-free regardless of amount, while savings interest above the PSA is taxed at 40–45%. For large holdings in higher tax brackets, the effective after-tax return from bonds can exceed what’s achievable from a taxable account.
A Cash ISA eliminates this tax disadvantage but may pay a slightly lower rate than the best instant-access accounts. The comparison depends heavily on your tax situation and savings rate.
