Premium Bonds: £63m prize pot boost means better odds for savers

And we take a look at Premium Bonds versus savings accounts.

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Published: September 7, 2026 at 9:32 AM

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Premium Bond holders have benefited from a £63 million boost in the last month, with NS&I increasing the prize fund rate from 3.8% to 4.35% and improving the odds of winning from 22,000-1 to 21,000-1.

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The latest increase takes the total prize pot to more than £497 million, with two £1 million jackpots still up for grabs each month.

The 4.35% prize fund rate means that, on average, £10,000 invested in Premium Bonds would generate £435 in prizes over a year, compared with £380 previously. However, this isn’t a guaranteed return, and you could win nothing at all.

More than 22 million people hold Premium Bonds, attracted by the chance of landing a life-changing jackpot and the fact that their money is 100% backed by the Treasury.

Sarah Coles, head of personal finance at AJ Bell, said: “Premium Bond holders will be delighted with the second hike in two months to the prize rate. It’s a decent jump, and is accompanied by a shortening of the odds.”

However, she warned that the increase doesn’t change the fact that “in an average month the average bond holder will win nothing”, with those holding smaller amounts even less likely to see any meaningful returns.

Premium Bonds versus savings accounts

If you prefer the certainty of guaranteed interest rather than taking a chance on winning a prize, it could be worth comparing Premium Bonds with savings accounts.

There are currently plenty of savings accounts offering returns above inflation, which can help protect the purchasing power of your cash.

According to Moneyfactscompare.co.uk, 1,850 savings accounts, including individual savings accounts (ISAs), are currently paying returns above the 2.9% inflation rate.

“For savers, beating inflation is the difference between simply earning interest and increasing the spending power of their money,” said Caitlyn Eastell, personal finance expert at Moneyfactscompare. “While a balance can be growing on paper, it could be shrinking in value if the savings rate fails to keep pace with rising prices.”

For example, if you put £10,000 into an easy access savings account paying 5% AER, you could earn £500 in interest over a year. Once inflation is taken into account, this would leave you with a real return of around £210.

By comparison, £10,000 in an average savings account paying 3.63% would generate £363 in interest, leaving a real return of around £73 after inflation.

Current best buy easy access savings rates include Spring’s Easy Access account, part of Paragon Bank, paying 5% on balances up to £5,000, and Cahoot’s Sunny Day Saver account paying 5% on balances up to £3,000.

For larger balances, First Active, part of NatWest, pays 4.55% on balances of up to £1 million, although this rate includes a 1.05% bonus for the first year.

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