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How they work

NS&I - 100% security for your money

With NS&I you can be sure that all of your capital is 100% secure, however much you invest. We can give you this guarantee because National Savings and Investments is backed by HM Treasury.

What are Premium Bonds?

Premium Bonds are an investment where, instead of interest payments, investors have the chance to win tax-free prizes. When someone invests in Premium Bonds they are allocated a series of numbers, one for each £1 invested. The minimum purchase is £100 (or £50 when you buy by monthly standing order), which provides 100 Bond numbers and, therefore, 100 chances of winning a prize. You can hold up to £30,000.

With 23 million bondholders holding £26 billion worth of Premium Bonds nationwide, Premium Bonds are one of Britain’s financial success stories. They are a fun, yet serious way of saving, combining the chance of winning tax-free prizes with the peace of mind that comes from knowing your capital is 100% secure.

Prizes

As well as the £1 million jackpot you can win anything from £25 to £100,000 for each Bond number you hold. If you win the jackpot, you will get a visit from Agent Million. The table below shows the full range of prizes:

Prize band	Prize value
Higher value:	£1 million £100,000 £50,000 £25,000 £10,000 £5,000
Medium value:	£1,000 £500
Lower value:	£100 £50 £25

Each month’s prize fund is equal to one month’s interest on the total value of all eligible bonds. The interest rate section gives the current prize fund rate, the number of jackpots, together with the share of the prize fund allocated to each prize band. It also gives the odds of each £1 Bond number winning a prize.

Changes to Premium Bonds prize fund

The interest rate used to calculate the prize fund, the number of jackpots, the share of prize fund allocated to each prize band and the odds of winning are all variable, so they may change from time to time.

Odds

We hold a prize draw every month. There is a £1 million jackpot and, at the current odds, over 1 million other cash prizes. The winning Bond numbers are selected at random, and each £1 Bond number has a separate and equal chance of winning a prize. If you would like to find out what the current odds are, see interest rates.

Tax-free advantages

Any prize you receive is free of UK Income Tax and Capital Gains Tax and you do not need to declare it on your tax return.

Who can invest?

Anyone aged 16 or over can buy Premium Bonds. Bonds can also be bought for a child under 16 by the child's parent, guardian, grandparent or great grandparent. Premium Bonds cannot be held jointly and are not transferable to another person.

Investing for a child

If you are a parent or guardian buying Premium Bonds for your child under 16, you'll need to give the child's details and your details on the application form. If you're the child's grandparent or great grandparent, you'll need to give the child's details, the parent's or guardian's and your own.

The parent or guardian will be responsible for the Bonds and will receive notification of the purchase. The Bond certificates will be sent to the purchaser to confirm their purchase. Any prizes will be sent to the parent or guardian.

Please note that Bonds cannot be bought for children under 16 years on-line, over the phone or by monthly standing order. If you would like to apply by post click here for an application form.

Investment limits

The minimum for each purchase is £100 (or £50 when you buy by monthly standing order – see investing regularly for details). Purchases above the minimum are in multiples of £10, and you can hold up to £30,000 in total. The more you invest the better your chances of winning, so it pays to invest as much as you can.

Access

You can cash in all or part of your Bonds at any time. Click here for more information on how to cash in.

Cheque and debit card clearance

If you buy your Bonds by cheque or debit card, your payment will be cleared on the seventh working day (ie excluding weekends and English bank holidays).

For example, if we receive your cheque or debit card details on a Monday, your payment will be cleared on the Tuesday of the following week. Allow one additional day for each English bank holiday.

Bonds can only be cashed in after your payment has cleared.

If you buy your Bonds at a Post Office® branch and pay by cheque, your payment will take two working days longer to clear.

We will bank your cheque, or start to process your debit card payment, as soon as we receive it, so please make sure you have enough money in your account at the time.

Investing regularly

The easiest way to build up your investment and increase your chances of winning is to buy Premium Bonds monthly by standing order. Once you’ve made your first purchase (on the internet, by telephone, by post or at a Post Office® branch) we will send you details of how to start investing regularly. If you already hold Premium Bonds, you can download a standing order form.

When Bonds go into the draw

Your Bonds become eligible to take part in the prize draws once you have held them for a full calendar month following the month you bought them. They then go into every draw until you decide to cash them in, giving you the chance every month to win tax-free prizes.

Selecting the winning numbers

Each month the winning Bond numbers are generated randomly by a machine called ERNIE (electronic random number indicator equipment). After ERNIE has generated the numbers, they are compared in the order they were generated against all eligible Bond numbers – those that match win a prize. Because ERNIE produces the numbers entirely at random, each individual Bond has a separate and equal chance of winning a prize, regardless of when, where and how it was bought.

Independent checks

ERNIE’s output is checked every month by the Government Actuary, who is independent of National Savings and Investments, to verify that the draw is random.

Winners

If you're a winner we will write to you, unless you win one of the £1 million jackpots when our representative will visit you personally with the good news (always ask for identification). So it's vital that you tell us of any change of name or address.

What if I live outside the UK?

You’ll need to check that local regulations allow you to buy Premium Bonds. If so, post your application form to our Blackpool office, together with your cheque, which must be in £ sterling and drawn on a bank in the UK.

Your right to cancel

If after investing in your Bonds you decide they do not meet your needs, let us know in writing* within 14 days of receiving your welcome letter and we will help you change to a different investment or refund your money.

* Either by post to Premium Bonds, National Savings and Investments, Blackpool, FY3 9YP, or by fax on 01253 793767 or by email to customerenquiries@nsandi.com

Protecting your personal information

When you become a customer of ours, we will treat all the personal information we hold about you as private and confidential. Click here for details on our privacy policy.

Our standards of service

At National Savings and Investments we aim to give all our customers a prompt, accurate and friendly service. If we make a mistake, we’ll aim to put things right quickly and without fuss. We also have a formal complaints procedure with an independent arbitration scheme. If you would like a copy of our complaints procedure leaflet, call us free on 0500 007 007. Your call will be taken by one of NS&I’s award-winning UK customer service team. We’re available every day from 7am till midnight. Calls from mobiles may not be free. Calls may be recorded.

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