Some investors might hit the jackpot and win a large prize early on, others may invest and wait many months for even a small return. NS&I pays out over 3 million prizes per month, so as the old adage goes, 'you've got to be in it, to win it'!
We pay out two £1 million jackpots each month.
Yes, however, each £1 bond can only have the chance to win one prize per month. They can win time and time again though. £25 = 25 x £1 bonds, and you then have 25 chances to win in each prize draw. Though the odds of that would be astonishing I would imagine!
The Premium Bond prize rate has risen from 2.2% to 3%
On the surface, Premium Bonds don't look complex. NS&I happily lists the chance of one bond winning a prize in a month (1 in 24,000) on its website.
Having your prizes paid straight into your bank account (or NS&I Direct Saver) is quick, easy and safe. If you win, we'll let you know the good news by email or text message. You'll then normally receive your prize money in your bank account by the 7th working day of the month.
If you want instant access to your cash, have £50,000 to invest, and especially if you pay higher rates of tax they are good value, returning on average around 2pc a year tax-free. But it is a close-run thing as market rates from banks and building societies are rising rapidly. Premium Bonds work like this.
Customers will need their Premium Bonds holder's number to use the website and their NS&I number or holder's number to check via the prize checker app. At the same time, they can check for any unclaimed prizes owed to them.
The odds of winning with each £1 bond number will remain the same at 24,000-1 but NS&I has beefed up the number of higher-value prizes and reduced the number of £25 ones.
The verdict
But your chance of winning the jackpot on the National Lottery (remember, one in 45 million in a week) is greater than if you have £100 in Premium Bonds (one in 49 million).
Other requirements are that the investment is greater than the minimum limit and in whole pounds, and uses a UK bank account which is in the purchaser's name. NS&I states that if a transfer takes a person over the £50,000 limit, then the transfer will be automatically refunded in full to the bank account.
If you want a regular income, Premium Bonds may not be the best option for you - you may be better off looking at different types of investment or savings accounts, including isas. You'll also receive no interest, as the interest accrued on bonds goes towards the prize fund.
A There are all sorts of theories. However there is absolutely no evidence that holding premium bonds in a single block has a better chance of winning.
We contact everyone when they win a Premium Bonds prize. But sometimes the good news doesn't arrive. This might be because you've moved and you haven't told us, you've changed some of your personal details or our letter went astray in the post. You never need to worry about an unclaimed prize.
What are the prize amounts for premium bonds? Most recently, the total prize amount for premium bonds was £96,395,075. The prizes are banded into higher value (£5,000 to £1 million), medium value (£500 and £1,000) and lower value prizes (£25, £50 and £100). There are around 3.3 million prizes in total every month.
That's because the annual prize fund rate on Premium Bonds - the government-backed savings bonds that pay a return via a monthly prize draw and which are held by 21 million Brits - has been increased from 1% to 1.4%.
Each £1 placed into Premium Bonds has an equal chance of getting a prize, so the more savings you have, the more chance you have of winning. Martin emphasised that Premium Bonds won't pay out much more on average than the interest on easy access or fixed rate savings accounts.
How Much Can I Earn From Interest With $50,000? An investor with $50,000 to invest for interest can earn from about $65 to about $2,250 in a year at current rates.
For someone with 'average' luck, Premium Bonds currently offer potentially higher returns than some savings accounts. The Premium Bond prize rate rose to 3.00% this month (January), which is higher than the best easy access savings account rates, which only offer 2.86%, according to financial website Moneyfacts.co.uk.
Are my old Premium Bonds still valid? Yes. As long as you haven't cashed your Bonds in, they're still valid and they're still being entered into our monthly prize draws.
Our Premium Bonds give you the chance to win cash prizes from £25 up to £1 million in our monthly prize draw. If you're a lucky winner, you won't have to pay a penny in tax on your prize. If you already hold some of our Savings Certificates, you won't have to pay tax on any returns you earn.
Tax and you do not need to declare it on your tax return. Anybody over the age of 16 can buy Premium Bonds, and you can also buy them on behalf of your child or grandchild.
Premium Bonds can be held by NS&I for 12 months after death. During this time, they are still eligible for cash prizes. After 12 months have passed, the executor of the estate or a nominated beneficiary can contact NS&I to claim the prizes and cash out the Bonds.
While Cash ISAs and Premium Bonds are very low-risk, they are unlikely to offer high returns. If you're happy to take more risk for the possibility of better returns, then a Stocks and Shares ISA might be better for you.
It's become a popular myth, but no – new Premium Bonds are not luckier. The reason it may appear that way is that of all the Bonds currently held, more than 90% have been bought since 2000. They may appear luckier because there are simply more of them! The thing to remember is all Bond numbers are equal.
The value of fixed income securities will fluctuate and, upon a sale, may be worth more or less than their original cost or maturity value. Bonds are subject to interest rate risk, call risk, reinvestment risk, liquidity risk, and credit risk of the issuer.