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Interest rates

We hold a prize draw every month. There are two £1 million jackpots plus, at the current odds, over 1.5 million other tax-free prizes, all free of UK Income Tax and Capital Gains Tax. The more Bonds you have, the better your chances of winning. We set the size of each month’s prize fund by allocating the equivalent of one month’s interest on the total value of eligible Bonds, at the annual rate shown below.

		Interest rate		Tax information
		3.40%		All prizes are tax-free

Odds

The number of prizes in each draw is determined by dividing the total number of eligible £1 Bond units by a number specified by the Treasury, as shown below. This specified number determines the odds of each £1 Bond unit winning a prize in the monthly draw.

		Specified number		Odds
		22,000		22,000 to 1

Prizes

The prize fund for each draw is shared between three prize bands — higher value, medium value and lower value. The table below shows the percentage share of the fund allocated to each prize band, together with an estimate of the number of prizes of each value for the July 2008 draw as an example.

Estimate for prize draw in July 2008

		Prize band		Prize value		Estimated number of prizes
		Higher value 6% of prize fund		£1 million		2
				£100,000		8
				£50,000		17
				£25,000		33
				£10,000		83
				£5,000		165
		Medium value 5% of prize fund		£1,000		2,044
				£500		6,132
		Lower value 89% of prize fund		£100		188,062
				£50		1,442,823
		Total estimated value for July 2008		£102.2 million		1,639,369

Please see the terms and conditions for full details of how we distribute the prizes within each prize band.

Changes to Premium Bonds prize fund

The interest rate used to calculate the prize fund, the number of jackpots, the share of the prize fund allocated to each prize band and the odds of each £1 unit winning a prize are all variable, so they may change from time to time. We will publicise changes by putting a notice in a range of national newspapers and updating this website page.