How to switch your premium bonds.
Someone with Premium BondsPremium Bonds (NS&I)Government-backed savings where instead of interest, each £1 bond is entered into a monthly prize draw. Tax-free. The 'rate' you see is an average — most months, a typical small holder wins nothing. while paying tax on cash interest elsewhere. At the August 2026 prize rate (4.35% — above every standard Cash ISA rate Feefee tracks) the headline-rate gap that drove switches earlier in 2026 has closed; the remaining comparison is a set monthly interest payment versus a variable prize draw. What follows is illustrative — the sequence a typical switch goes through, and the parts the receiving provider handles for you.
The typical sequence.
- 01
NS&INational Savings & InvestmentsA government-backed savings provider (HM Treasury). Products are 100% protected by the Treasury — no FSCS limit applies. Includes Premium Bonds and various savings accounts.’s online portal handles partial or full cash-ins.
- 02
The proceeds can move into a higher-rate Cash ISAIndividual Savings AccountA UK tax-free wrapper. Anything inside grows free of UK tax on interest, dividends, or gains. £20,000 yearly cap on new money across all your ISAs. or easy-accessEasy-access savingsCash savings you can withdraw any time without notice or penalty. Rates are usually variable. Trades flexibility for slightly lower rates than fixed-term equivalents. savings account, depending on the tax-allowance picture.
- 03
NS&I cash-outs typically take 5–10 working days.
Gotchas.
- !Premium Bonds are tax-free. For higher-rate taxpayers near the £500 PSAPersonal Savings AllowanceTax-free interest each year: £1,000 for basic-rate taxpayers, £500 for higher-rate, £0 for additional-rate. Interest above this is taxed at your marginal rate. limit, that tax-free framing changes the comparison.
- !Returns on Premium Bonds are highly variable — the headline rate is an average, and a typical small holder wins nothing in many months. The £1m prize is real but the odds of any prize per £1 bond are 21,000:1 per draw (August 2026).
- !Some people hold a small Premium Bonds slice for the prize-draw aspect rather than the return. That’s a personal preference call.
Who Feefee compares.
- NS&I (Premium Bonds)4.35% AERAnnual Equivalent RateA standardised way to express savings interest, accounting for compounding. Lets you compare rates fairly across providers.
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.
- Other / not listed—
Not on the list? Pick this and tell Feefee what you're getting (rate or fee). We'll compare against the lowest-fee or highest-rate alternative we track.
See it on your numbers.
Sixty seconds, no logins. Drop your balances in and see what each option would actually mean for your setup, side by side.