Premium Bonds
Premium Bonds do not pay interest. Each £1 Bond goes into a monthly prize draw. The 4.35% prize fund rate is an average, and a typical holding wins less than that.
Last checked: 14 October 2026. We check this page regularly against official sources.
Premium Bonds are a savings product from NS&I. You do not earn interest. Your money is split into £1 Bonds, and each Bond number goes into a monthly prize draw.
This page explains how that works, using figures published by NS&I and a typical-outcome table published by MoneySavingExpert. It is information only. It is not a recommendation to buy, hold or cash in Premium Bonds.
What they are
NS&I enters each eligible £1 Bond into a prize draw every month. The draw is run by ERNIE, NS&I’s random number generator. Every £1 Bond in the draw has the same chance. A bigger holding means more entries.
You can buy Premium Bonds if you are 16 or over and have a UK bank account. A parent or guardian can buy them for a child under 16, and looks after them until the child turns 16. If more than one adult manages Bonds for the same child, the child must still stay within one holding limit. NS&I does not offer Premium Bonds as a joint account.
Each purchase is at least £25, in whole pounds. The most one person can hold is £50,000. That cap includes Bonds held for a child under 16. Anything that would take a holding over £50,000 is refunded.
A new Bond has to be held for one full calendar month after purchase before it can win. You can cash in all or part of your holding at any time.
£50,000
The prize fund rate is an average
The annual prize fund rate is 4.35%, variable. The odds are 21,000 to 1 for every £1 Bond in each monthly draw, and the odds are variable too. Both have applied from the September 2026 draw. Before that, from the July 2026 draw, the rate was 3.80% and the odds were 22,000 to 1. NS&I announced the change on 18 August 2026. The October 2026 draw used 4.35% and 21,000 to 1 again.
NS&I can change the rate, the prize values, the odds and the way prizes are shared at any time, including before a new Bond reaches its first draw.
The 4.35% is the rate NS&I uses to size the prize fund. For every £100 in eligible Bonds, £4.35 a year goes into prizes on average. It is a mean: the total of all prizes divided across every Bond, including Bonds that win nothing. A small number of large prizes, including two £1 million prizes each month, take part of that fund. The smallest prize is £25, so a holding cannot be paid a smooth 4.35%.
Someone with a typical holding should expect less than the headline rate. Many win nothing in a given month, because each £1 Bond’s chance in that month is 21,000 to 1.
NS&I does not publish a median, which is the result in the middle. MoneySavingExpert does. Its table below is its own estimate of what someone with typical luck would win over a year at the 4.35% rate. These figures are not from NS&I, and they are not a forecast for any one person.
| Amount in Premium Bonds | Median winnings over a year | Equivalent prize rate |
|---|---|---|
| £100 | Nothing | 0% |
| £1,000 | Nothing | 0% |
| £10,000 | £350 | 3.5% |
| £25,000 | £925 | 3.7% |
| £50,000 | £1,900 | 3.8% |
MoneySavingExpert, “What you’ll win over a year with average luck, based on the 4.35% rate”. The page was updated on 1 October 2026 and checked for this guide on 14 October 2026.
At £100 and £1,000, that published median for a whole year is nothing. At £10,000, £25,000 and the £50,000 maximum, the published median rate is 3.5%, 3.7% and 3.8%. Each of those is below 4.35%.
Prizes in the October 2026 draw
Prizes run from £25 to £1 million. NS&I splits the prize fund into three bands: higher value 10%, medium value 10%, and lower value 80%. There are two £1 million prizes each month.
These are the prizes NS&I paid in the October 2026 draw. NS&I also shows an estimate for November 2026 and says that estimate can change, so it is not listed here.
| Prize | Number paid in October 2026 |
|---|---|
| £1 million | 2 |
| £100,000 | 96 |
| £50,000 | 191 |
| £25,000 | 382 |
| £10,000 | 957 |
| £5,000 | 1,914 |
| £1,000 | 19,934 |
| £500 | 59,802 |
| £100 | 2,371,145 |
| £50 | 2,371,145 |
| £25 | 1,721,281 |
That draw paid 6,546,849 prizes, worth £498,378,775. NS&I says 137,483,797,618 £1 Bonds were eligible.
The 21,000 to 1 figure is the chance that one £1 Bond wins any prize in one month. It is not the chance that a whole holding wins, and it is not a yearly rate of return.
What you get
- Backed by HM Treasury — 100%, no limit. That includes Premium Bonds. The holding limit is still £50,000 per person.
- Prizes are tax-free. They are free of UK Income Tax and Capital Gains Tax.
- You can cash in at any time. NS&I lets you cash in all or part of your Bonds whenever you want.
What you give up
- No guaranteed return. Premium Bonds do not pay interest. You might win nothing in a month, or over a longer stretch. The 4.35% prize fund rate is an average. Most people win less. It is not a guaranteed AER, and it is not a promise of what one holding will win.
- Inflation. NS&I says inflation can reduce the true value of your money over time. Months with no prize do not add to the pounds you hold.
- The odds are per £1 Bond. Each £1 Bond has a 21,000 to 1 chance of a prize in a given monthly draw. More Bonds mean more entries. They do not make a prize certain.
Sources
Checked on 14 October 2026.
- NS&I, Premium Bonds: 4.35% variable prize fund rate; odds 21,000 to 1 per £1 Bond; minimum £25; maximum £50,000; prizes from £25 to £1 million; prizes free of UK Income Tax and Capital Gains Tax; cash in at any time; inflation warning.
- NS&I, interest rates: Premium Bonds odds 21,000 to 1 and annual prize fund rate 4.35% variable. The rate and the odds are variable.
- NS&I, historical interest rates: September 2026, 4.35% and 21,000 to 1. July 2026, 3.80% and 22,000 to 1.
- NS&I press release, 18 August 2026: prize fund rate and odds from the September 2026 draw; 100% security backed by HM Treasury; holding limit £50,000, including under 16.
- NS&I press release, 1 October 2026: October draw still 4.35% and 21,000 to 1; prize counts and totals; 137,483,797,618 eligible £1 Bonds; a new Bond needs one full calendar month before it is in the draw.
- NS&I, monthly prize allocation: October 2026 prize counts; higher, medium and lower bands at 10%, 10% and 80%.
- NS&I, how we protect your money: HM Treasury guarantees 100% of everything invested in NS&I.
- MoneySavingExpert, Premium Bonds: median winnings over a year at the 4.35% rate. Updated 1 October 2026. This table is MoneySavingExpert’s estimate, not an NS&I figure.
ClearRates does not sell Premium Bonds. Nothing on this page is financial advice, or a suggestion to buy, hold or cash them in. Check the current rate, odds and limits on the NS&I pages above before you act.
Questions
Is the 4.35% prize fund rate what I will earn?
No. NS&I uses that rate to fund the monthly prize draw. It is an average across every eligible £1 Bond, and large prizes pull the average up. MoneySavingExpert publishes a median (a typical result) that is lower than 4.35% at every amount in its table, and nothing at £100 and £1,000 over a year. NS&I does not publish a median.
What are the odds?
NS&I states odds of 21,000 to 1 for every £1 Bond in each monthly prize draw. The odds are variable. They have applied from the September 2026 draw, and the October 2026 draw used the same odds.
Are Premium Bonds covered by the FSCS?
Money with NS&I is backed by HM Treasury — 100%, no limit. The most one person can hold in Premium Bonds is still £50,000.
Are prizes taxed?
NS&I says prizes are free from UK Income Tax and Capital Gains Tax.
Can I cash in Premium Bonds?
Yes. NS&I says you can cash in all or part of your Bonds at any time. A Bond you have just bought is not in the draw until it has been held for one full calendar month.