Skip to main content
GovMath.

Investing & Pensions · Prize rate 3.80%

Premium Bonds Expected Prize Calculator

NS&I Premium Bonds pay no interest — instead each £1 bond enters a monthly draw. We show your expected average return at the current prize fund rate, plus the taxable-account equivalent.

£
%
yrs

Expected annual prizes

£950

≈ £79/month average — actual wins vary widely.

Breakdown

  • Holding
    £25,000
  • Expected annual prizes
    £950
  • Total over 5 year(s)
    £4,750

Equivalent taxable yield

  • Basic rate (20%) equivalent
    % gross interest needed elsewhere
    £5
  • Higher rate (40%) equivalent
    % gross interest needed elsewhere
    £6

How we calculated your result

Expected annual prizes = holding × prize fund rate. Prizes are tax-free, so we also show what gross interest you’d need in a standard taxable account to match the rate at basic and higher tax rates.

Official UK rules in simple English

  • £25 minimum, £50,000 maximum holding.
  • Each £1 bond is a separate entry — every month, every bond.
  • Prizes from £25 to £1,000,000, drawn monthly by ERNIE.
  • Held in trust by NS&I — fully government-backed.

Common pitfalls to watch out for

  • ⚠ Median return is lower than ‘expected’

    The rate is an average pulled up by huge jackpots. The typical (median) holder wins less than the headline rate — small holdings often win nothing for months.

  • ⚠ Tax-free but capped

    Most savers already shelter interest in their £1,000 Personal Savings Allowance. Above that, the tax-free element matters more.

  • ⚠ Not inflation-proof

    Premium Bonds aren’t index-linked. In a 5% inflation year, the ”expected” 3.80% prize rate is a real loss.

Frequently asked questions

How are winnings paid?
Free bank transfer (default) or auto-reinvested as more bonds. Old paper cheques have been phased out.
Do older bonds win less?
No — every bond has equal odds. The conspiracy theory is myth: NS&I publishes the draw seed every month.
Can I include them in my ISA?
No — Premium Bonds sit outside the ISA wrapper. They have their own tax-free wrapper baked in.

Expected values only. Actual returns vary widely. Current rate from nsandi.com — adjust if it changes.

Related calculators

More tools in Investing & Pensions.