NS&I (Premium Bonds)
Illustrative reference data — not personal financial advice. Verify rates and fees on the provider’s own pages before acting.
100% capital safe (HM Treasury). Tax-free prizes — winners can receive up to £1m in a single draw, though winning anything in any given month is unlikely for a typical small holder. Prize fund rate 4.35% (variable), odds 21,000:1 per £1 Bond — up from 3.30% earlier in 2026. The headline rate is an AVERAGE across all bondholders; expected return for a small holder is materially lower.
Products tracked
- Premium Bonds4.35% AER
- Tax-free prizes (no tax on winnings)
- 100% capital safe — HM Treasury backed (no FSCS cap)
- Two £1,000,000 prizes drawn every month
- Withdraw any time, no notice
- Headline 4.35% (Aug 2026) is an AVERAGE — actual return is 0% in many months
- Small holdings (<£10k) often underperform a top Cash ISA badly
- No compounding — prizes paid out, not reinvested by default
- Prize rate is variable and has moved several times in 2026 (3.60% → 3.30% → 4.35%) — check the current rate before relying on it
- No FSCS protection needed — fully HM Treasury backed
FSCSFinancial Services Compensation SchemeUK government-backed protection if a firm fails. Cash deposits at an authorised bank or building society are covered up to £120,000 per person, per banking group (raised from £85,000 on 1 December 2025). Investments at an authorised platform are covered up to £85,000 — a separate scheme. NS&I sits outside FSCS with 100% HM Treasury backing. protection
100% HM Treasury backed — unlimited cover, separate from FSCS.
FSCS deposit cover is per banking licence (not per brand). Lloyds Banking Group includes Lloyds, Halifax, Bank of Scotland, and Birmingham Midshires — all share one £120,000 cap. Investment platforms run on a separate FSCS scheme capped at £85,000. NS&I sits outside FSCS with 100% HM Treasury backing. Spreading large balances across separate licences preserves coverage.
Premium Bonds prize fund rate 4.35% (variable) — up from 3.30% earlier in 2026. Odds 21,000:1 per £1 bond per draw (improved from 23,000:1). Min £25 per transaction, max £50,000 holding. Direct Saver 3.75%, Income Bonds 3.75% AER, Direct ISA 3.80%.
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The fees and rates above are reference data. Run the 60-second sniff to see what NS&I would mean for your actual balance against alternatives Feefee tracks.
Reference data only — not personal financial advice or a recommendation. Rates and fees move; verify on the provider’s own pages before opening or transferring an account. Provider trademarks belong to their respective owners; NS&I (Premium Bonds) appears here under nominative fair-use as identification of a UK financial product.