Premium Bonds: How They Work, Limits, Odds and How to Buy

Premium Bonds sit in an odd spot: they're savings, but what you get back depends on luck rather than a fixed interest rate. That's exactly why it pays to know how the draw works before you move money in. Here's what NS&I, the only place you can buy them, says about the limits, the prize draw, how to buy, how to check for prizes and who they're not designed for.

Premium Bonds at a glance

These are the key facts from NS&I's product page, as of Nov 2026. NS&I says the rate, prize values and odds are all variable, so they can change at any time.

Question	What NS&I says
Annual prize fund rate	4.35%, variable, from the September prize draw
Odds of winning	21,000 to 1 for every 1 pound Bond in the monthly draw, variable
Tax on prizes	Free from UK Income Tax and Capital Gains Tax
Minimum you can pay in	25 pounds per investment
Maximum you can hold	50,000 pounds in total
Who can buy	Anyone 16 or over with a UK bank account, plus gifts for a child under 16
Interest	None. The rate funds the prize draw instead

How the monthly prize draw picks winners

NS&I says it pays out millions of prizes every month to Bond holders whose numbers are generated by its random-number generator, ERNIE. Every 1 pound Bond in the draw has the same odds of winning, and the more Bonds you hold, the more chances you have. Prizes range from 25 pounds to 1 million pounds and they're all tax-free.

The prize fund rate is what pays for the draw. NS&I can move it up or down, for example when the Bank of England base rate changes or when rates across the savings market change. When the rate changes, it updates its website, and if the rate goes down NS&I says it'll contact you personally in advance. Its prize checker page lists a prize fund of more than 498 million pounds and more than 6.5 million prizes for its latest draw.

Bonds over the 50,000 limit can't win

This is the rule that's easy to miss if you top up regularly or reinvest prizes. NS&I says any Premium Bond numbers above the 50,000 pounds limit aren't eligible to win prizes. If a number beyond the limit is drawn and a prize is paid in error, NS&I has the right to reclaim it. The same 50,000 pounds total applies to a child, even when more than one parent or guardian manages Bonds for them under separate holder's numbers.

Five ways to buy Premium Bonds

1. Online: apply through NS&I's website with your debit card details ready.
2. By phone: NS&I's UK team takes calls every day except bank holidays. You can't buy by phone for someone else's child, and NS&I doesn't accept credit cards.
3. By post: fill in an application form and send it with a cheque payable to NS&I.
4. Bank transfer or standing order: available if you, or the child you're buying for, already hold some Premium Bonds.
5. Switching from another NS&I account: if you have an NS&I Direct Saver you can pay from it online, and other NS&I accounts can be switched with a short online form or a paper form.

To apply for yourself you'll need your NS&I number if you have one, your address and date of birth, UK bank account details registered to your current address, and a debit card from a UK bank or building society. NS&I says it aims to open your account in 7 to 10 working days, though it can take longer if it has to ask for identity documents.

Buying Bonds as a gift for a child

Premium Bonds can be bought for a child under 16. Until the child's 16th birthday, the parent or guardian named on the application looks after the Bonds, whoever paid for them, and any prizes belong to the child. At 16, the child manages their own Bonds.

• Your own child: parents or legal guardians can apply online, by phone or by post. If the child already has Bonds and you want to buy more online or by phone, you'll need to register first, which can take a few days.
• Someone else's child: you can apply online or by post, and NS&I can send an electronic or paper gift card for you to pass on. Only the nominated parent or guardian can manage and cash in the Bonds, and the money can't be repaid to you.
• Identity checks: NS&I checks everyone named on the application, so you'll need your own, the child's and the parent or guardian's address and date of birth.

Checking for prizes and getting paid

NS&I's free prize checker app, on the Apple App Store and Google Play, shows the current month's prizes and anything you've won in the previous six draws. You can also use the online prize checker with your holder's number, or ask Alexa once you've enabled the Premium Bonds prize checker skill.

If you win, NS&I tells you by email or text and normally pays the prize into your bank account (or NS&I Direct Saver) by the 7th working day of the month. You can choose to have prizes reinvested in more Bonds, which become eligible from the very next draw, or take a cheque by post, which is slower. For prizes of 25,000 pounds, 50,000 pounds or 100,000 pounds, NS&I sends a claim form on the first working day of the month, and you must return it before it pays out. The 1 million pounds jackpot comes with a visit in person from NS&I's Agent Million.

Cashing in and keeping track

You can cash in all or part of your Bonds at any time, by logging in, by phone, online without an account (with your holder's number and bank details), or by posting a cashing-in form. Your holder's number links all your Bonds and is different from the NS&I number you get when you register for online and phone service, so keep both somewhere safe.

On security, NS&I says most banks only guarantee savings up to 120,000 pounds, and that it's the only provider securing 100% of savings above that amount because it's backed by HM Treasury.

Who NS&I says Premium Bonds aren't for

NS&I is unusually direct here. It says Premium Bonds aren't for you if you want a regular income from your savings, guaranteed returns, or to save jointly with someone else. It also reminds savers that inflation can reduce the true value of money over time, and with no interest paid, a run of months without a prize means your balance stands still.

Plain advice before you buy Premium Bonds

Treat Premium Bonds as a home for money you want to keep easy to reach while taking a chance on prizes, not as a reliable income, which is how NS&I itself describes them. Keep your total under the 50,000 pounds limit so every number can win, and read the key product information and customer agreement on NS&I's Premium Bonds page before you apply.

If you're building a savings habit around them, these money-saving apps for the UK, money-saving tips that work and budgeting apps are good places to find the spare cash in the first place.

Frequently asked questions

What is the minimum and maximum for Premium Bonds?

As of Nov 2026, NS&I says each investment must be at least 25 pounds and you can hold up to 50,000 pounds in total.

Are Premium Bond prizes taxed?

No. NS&I says any prizes you win are free from UK Income Tax and Capital Gains Tax.

What are the odds of winning with Premium Bonds?

NS&I lists odds of 21,000 to 1 for every 1 pound Bond in the monthly prize draw, from the September prize draw. The odds are variable and can change at any time.

Do Premium Bonds earn interest?

No. There's an annual prize fund rate instead, which funds a monthly prize draw for tax-free prizes.

Can I buy Premium Bonds for a child?

Yes, for a child under 16. A parent or guardian named on the application looks after the Bonds until the child turns 16.

How do I check if I've won?

Use NS&I's prize checker app or online prize checker with your holder's number, or ask Alexa after enabling the Premium Bonds prize checker skill.