Premium Bonds currently have an annual prize fund rate of 4.35%, with each eligible £1 bond number having a one-in-21,000 chance of winning a prize in the monthly draw.
According to NS&I’s official announcement, the rate increased from 3.80% for the September 2026 draw. The odds also improved from one in 22,000.
Both the rate and the odds are variable, meaning they can change. The figures shown on NS&I’s website are existing terms rather than a fresh rate increase announced on 6 October.
The rate is not a guaranteed return
Premium Bonds do not pay interest. Instead, eligible bond numbers enter a monthly draw for tax-free prizes.
MoneySavingExpert explains that the prize fund rate describes the money distributed across the scheme, rather than a return promised to each individual.
Some holders win large prizes, while others receive little or nothing. Its analysis says most savers with typical luck receive less than the advertised prize fund rate, including those holding the maximum amount.
A saver with £1,000 therefore cannot assume they will receive £43.50 over a year. Their winnings depend on the draw.
Understanding the odds
The one-in-21,000 figure applies to each eligible £1 bond number in each monthly draw. It is not a promise that someone holding 21,000 bond numbers will win every month.
Holding more eligible numbers provides more entries, but does not guarantee a prize. The Guardian’s coverage also distinguishes the advertised prize rate from an individual saver’s actual return.
How to apply
According to NS&I’s Premium Bonds product page, people aged 16 or over can buy bonds for themselves. The minimum purchase is £25, and the maximum holding is £50,000 per person.
Applications can be made online, by telephone, or by post. Applicants should read the current customer agreement before purchasing.
New bonds must be held for a full calendar month before becoming eligible. Bonds bought during October would therefore first enter the December draw.
NS&I says money can be withdrawn without notice or a penalty, although withdrawals normally take three to five days to reach a bank account. Prizes are exempt from UK Income Tax and Capital Gains Tax.
Security and income are different.
NS&I states that Premium Bonds have Treasury backing. This protects the money held in the scheme, but does not guarantee winnings.
The practical distinction is between keeping savings secure and receiving a predictable income. Premium Bonds offer the chance of prizes; they do not provide regular interest payments.
