Premium Bonds Calculator
See what Premium Bonds actually pay: the typical (median) win on your holding, your odds of winning nothing, the jackpot chance, and how it stacks up against a savings account. The real odds, not the headline rate.
Your numbers
£25 minimum, £50,000 maximum per person.
Your choice, for the comparison. Both Premium Bonds prizes and cash ISA interest are tax-free.
What happens to my data?
Typical win (median)
£150
Chance of winning nothing
7%
The ads imply (average)
£190
Luckiest 10% win over
£325
Hold £5,000 for a year and half of people like you win £150 or less, while about 7% win nothing at all. The £190 "average" the headline 3.8% rate implies is dragged up by a tiny number of big winners, so most holders never see it.
Premium Bonds vs a savings account
Typical Premium Bonds win
£150
Savings at 4%, guaranteed
£200
Premium Bonds returns are a gamble around the average; a savings account pays its rate for certain. For most small and medium holders the guaranteed rate wins.
The £1 million jackpot: with £5,000 held for a year, your chance of landing it is about 1 in 1,141,467. Two jackpots are drawn each month from roughly 6,226,179 prizes in total, and about 99% of those prizes are for £25, £50 or £100.
Embed this calculator on your site
Paste this snippet wherever you'd like the calculator to appear. Free to use, no account required, attribution preserved.
<iframe
src="https://freedomisntfree.co.uk/tools/premium-bonds-calculator?embed=1"
width="100%"
height="860"
style="border: 1px solid #e5e7eb; border-radius: 12px; max-width: 720px;"
loading="lazy"
title="Freedom Isn't Free calculator"
referrerpolicy="no-referrer-when-downgrade"
></iframe> The iframe auto-resizes to fit content if your page listens for fif-embed-resize postMessage events.
The complete guide
Premium Bonds Calculator: What They Really Pay
The Premium Bonds prize rate is 3.80%, but the typical holder wins less. This calculator shows the real odds on £5,000 to £50,000 and when savings win.
Premium Bonds are the strangest product in British personal finance: 24 million people hold them, and almost none of them can tell you what they actually pay. That is not an accident. The number NS&I puts on the tin, the prize fund rate of 3.80%, is an average, and the prize pot is so skewed by a handful of enormous prizes that the average is a figure most holders never actually receive.
This calculator exists to show you the honest version: not "what you could win", but what a typical person holding your amount actually takes home, how often they win nothing, and how that stacks up against simply leaving the money in a savings account.
Contents
- Why the headline rate is misleading
- How the odds actually work
- Is it worth having £20,000 or £50,000 in Premium Bonds?
- Premium Bonds vs a savings account or cash ISA
- When Premium Bonds genuinely make sense
- Frequently Asked Questions
Why the headline rate is misleading {#why-the-headline-rate-is-misleading}
The prize fund rate is worked out across every Bond in the draw. NS&I takes 3.80% of the total invested each year and pays it out as prizes. If prizes were spread evenly, everyone would get 3.80% and there would be nothing to explain.
They are not spread evenly. In a single monthly draw there are two £1 million prizes and a long tail of six-figure and five-figure prizes, and then millions of £25, £50 and £100 prizes for everyone else. About 99% of all prizes are £25, £50 or £100. Those two millionaires walk away with a slice of the pot that would otherwise have topped up hundreds of thousands of ordinary holders.
The result is that the average is pulled well above what a normal person receives. Statisticians call the honest figure the median: line every holder up from unluckiest to luckiest and look at the one in the middle. For anything below the maximum holding, the median sits noticeably below the 3.80% average, and a real share of holders win nothing at all in a given month. The calculator runs thousands of simulated years for your holding and reports that median, plus the chance of a blank spell.
How the odds actually work {#how-the-odds-actually-work}
Every £1 Bond has a 22,000 to 1 chance of winning any prize in each month's draw. Each pound is its own independent ticket, so the more you hold, the more tickets you have.
- With £1,000 you have 1,000 tickets a month. Most months you win nothing; across a year you might see one or two £25 prizes.
- With £5,000 you have 5,000 tickets. You will usually pick up a few small prizes a year, but there is still roughly a one-in-three chance of an empty month.
- With the £50,000 maximum you have 50,000 tickets. Now you win enough small prizes that your yearly total starts to behave, landing somewhere near the 3.80% average, because the luck averages out across many wins.
The odds of a specific big prize stay tiny no matter what. Even at the £50,000 maximum, your chance of the £1 million jackpot in any year is still comfortably worse than one in ten thousand. The calculator shows the real jackpot odds for your holding so you can see exactly how remote it is.
Is it worth having £20,000 or £50,000 in Premium Bonds? {#is-it-worth-having-large-amounts}
This is the most-asked question, and the answer depends on two things: tax and the going savings rate.
At £20,000, your typical annual win still tends to come in below the £760 the 3.80% average implies, with the odd empty month. If you have spare Personal Savings Allowance, an easy-access account paying more than 3.80% will usually beat the Premium Bonds median outright, because that rate is guaranteed and Premium Bonds only average it. If your savings interest would be taxed, the tax-free prizes close the gap.
At £50,000, the maths shifts. You hold so many Bonds that your winnings usually land near the 3.80% average, around £1,900 a year, give or take a lucky or unlucky run. It is a reasonable home for a large cash pile you want kept completely safe and tax-free, and where you enjoy the monthly draw. It is still not the best guaranteed return if a savings account or cash ISA is paying more than 3.80%.
Set your own figure in the calculator and compare it against a realistic savings rate to see the gap for your situation.
Premium Bonds vs a savings account or cash ISA {#premium-bonds-vs-savings}
For a certain return, a savings account or cash ISA wins on the numbers. It pays its advertised rate to the penny, while Premium Bonds pay an average that the typical holder never quite reaches. If a cash ISA or easy-access account is paying above 3.80% and you are inside your tax allowances, it will almost always pay more than the Premium Bonds median. Our best savings accounts guide tracks where the going rate sits, and Premium Bonds vs cash ISA runs the same comparison in more depth.
Two things tilt back towards Premium Bonds. First, tax: prizes are completely tax-free and do not touch your Personal Savings Allowance, which matters if you are a higher earner or already earning taxable interest elsewhere. Second, safety at scale: bank savings are protected by the FSCS up to £120,000 per banking licence, but Premium Bonds are backed 100% by HM Treasury with no limit, so a large balance sits behind a stronger guarantee than the same money in a single account.
When Premium Bonds genuinely make sense {#when-they-make-sense}
Strip away the marketing and Premium Bonds are a fair choice in three specific cases:
- You have used your tax allowances and want tax-free growth on cash. A higher-rate taxpayer with taxable interest elsewhere can find the tax-free prizes worth more than a slightly higher taxable rate.
- You want a large sum kept absolutely safe. The unlimited Treasury backing beats spreading money across several banks to stay under FSCS limits.
- You value the flutter and can afford to. For money you are keeping in cash anyway, swapping a guaranteed few percent for a tiny chance of a huge prize is a personal call, not a maths error, as long as you go in knowing the typical win is lower than the headline.
What Premium Bonds are not is a way to beat a good savings rate. If the goal is the most money for certain, the calculator will usually point you at the guaranteed option. This is information, not advice: your own tax position and the rates on offer decide it, and both change.
Frequently Asked Questions {#frequently-asked-questions}
How often do you win with £5,000 in Premium Bonds?
With £5,000 you hold 5,000 £1 Bonds, and each one has a 22,000 to 1 chance of winning in any monthly draw. In practice that means a few small prizes across a typical year, but no guarantee in any single month. Roughly one month in three, £5,000 wins nothing at all. The calculator runs thousands of simulated years for that holding and shows the typical annual total plus how often you draw a blank.
What is the best amount to have in Premium Bonds?
There is no single best figure. The more you hold, the closer your yearly winnings sit to the 3.80% average, because luck averages out across more Bonds. Below the £50,000 maximum, the typical result falls short of that average and the swings are wider. If you want the draw to behave predictably, the maximum holding gets you closest; if you are chasing the best guaranteed return, the amount almost does not matter, because a savings account paying above 3.80% beats the median at any size.
Do Premium Bonds pay interest?
No. Premium Bonds pay no interest at all. Instead, the interest that would have been paid across all holders is pooled and handed out as tax-free prizes through the monthly draw. That is why two people holding the same amount can end a year with very different totals, and why the typical holder wins less than the headline 3.80% prize fund rate implies.
Are Premium Bonds safe?
Yes. Your capital is never at risk from the draw, and every pound is backed 100% by HM Treasury with no upper limit. That is a stronger guarantee than a bank account, where the FSCS protects only the first £120,000 per banking licence. The only thing you can lose is the return you would have earned elsewhere, because inflation erodes money that wins nothing.