Our savings and investments - Premium Bonds prize draw details
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Premium Bonds – prize draw details
We hold a prize draw every month with two £1 million jackpots. We set the size of each month’s prize fund by calculating one month’s interest on the total value of all eligible Bonds, at the annual rate shown below.
|Annual prize fund interest rate||Interest rate||Tax information|
|From 1 August 2014||1.35%||All prizes are tax-free|
Odds of winning
The odds of each £1 Bond winning a prize are shown below. We calculate the number of prizes in each draw by dividing the total number of eligible Bond units by the odds.
|Odds of winning||Odds|
|From 1 August 2013||26,000 to 1|
The table below shows the value of the individual prizes together with the number of prizes of each value for the August 2014 draw, as an example. We’ll update this estimate every three months or whenever we change the prize fund interest rate, prize values, odds or prize distribution.
|Prize band||Prize value||Number of prizes
|Higher value (7% of prize fund)||£1 million||2|
|Medium value (5% of prize fund)||£1,000||1,110
|Lower value (88% of prize fund)||£100||15,211
|Total value for August 2014 (estimated)
How we share out the prizes
We split the prizes into three value bands – higher, medium and lower – and allocate a percentage share of the monthly prize fund to each band.
Higher value band
We pay out two £1 million jackpots each month. We then divide the balance of the prize fund share allocated to the higher value band equally among the remaining prize values. First we work out the number of £100,000 prizes. Then we carry forward any balance which is less than half of that prize value to the share for the £50,000 prizes. Or, if any balance is at least half of the prize value, we award an additional prize of £100,000, taking the shortfall from the share for the £50,000 prizes.
We then calculate the numbers of other prizes in this value band in the same way, from highest value to lowest value. When calculating the number of £5,000 prizes, any surplus or shortfall is added to or taken from the medium value band.
Medium value band
From the share of the prize fund allocated to this band, we calculate the number of prizes so that there is one £1,000 prize for every three £500 prizes. If there’s any surplus, we add it to the share allocated to the lower value band.
Lower value band
We work out the number of lower value prizes so that there is an equal number of £100 and £50 prizes, and that the total number of prizes of all values (including £25 prizes) is equal to the number of eligible £1 Bond units divided by the odds.
In the unlikely event of a shortfall in the total number of prizes, we may increase the share allocated to the lower value band and reduce the shares allocated to the higher and medium value bands. If there is a surplus, we will carry it forward to the prize fund for the following month.
Changes to Premium Bonds prize fund
The prize fund interest rate, prize values, odds of winning and the way we allocate the number of prizes of each value are all variable, so they may change from time to time. Please check this page regularly to keep up-to-date with any changes.