Premium Bonds Calculator
Our premium bonds calculator estimates the expected value of prizes you could win on any holding amount over any period, based on the current NS&I prize fund rate. Premium bonds offer 100% capital security and the possibility of life-changing prizes — but the expected return depends entirely on your holding size and can be lower than a standard savings account for smaller balances.
Premium Bonds Calculator
Estimate your expected prize winnings based on your Premium Bonds holding.
How Premium Bonds Work
Premium bonds are issued by NS&I (National Savings and Investments), backed by HM Treasury — meaning your money is as safe as any savings can be. Rather than earning a fixed interest rate, all interest is pooled into a monthly prize fund and distributed as tax-free prizes ranging from £25 to £1 million. The prize fund rate in 2026 is approximately 4.4% — but this is the average across all bondholders. Your personal return depends entirely on luck.
Each £1 bond has an equal chance of winning in any given month. The probability of any individual £1 bond winning a prize in a given month is approximately 1 in 21,000. With the maximum holding of £50,000, you hold 50,000 bonds — each independently eligible to win. The expected monthly prize income at maximum holding is approximately £183, or roughly £2,200 per year — equivalent to the 4.4% prize fund rate.
Expected Return vs Actual Return
The expected return from premium bonds equals the prize fund rate (currently 4.4%) — but this expected return is only reliable over long holding periods and large balances. With £1,000 in premium bonds, the expected annual prize income is just £44. In any given year, you could win more, win less, or win nothing at all. The distribution of outcomes is highly variable for small holders.
For larger balances (£20,000+), the law of large numbers makes the actual annual return more reliably close to the expected rate — though still with significant variance. The maximum holding of £50,000 virtually guarantees some prizes most months, but the specific amounts vary widely. See our Savings Calculator to compare the guaranteed return of a best-buy savings account against your premium bond expected return.
Frequently Asked Questions
Yes — all premium bond prizes are completely tax-free and do not need to be declared on a tax return. This makes them particularly valuable for higher and additional rate taxpayers, who would otherwise pay 40% or 45% on savings interest above their Personal Savings Allowance.
NS&I runs a prize draw on the first of each month. You can check your winnings through the NS&I app, website, or by contacting NS&I directly. Prizes are paid automatically to your linked bank account or by warrant (cheque). You can also use the prize checker tool on the NS&I website or the premium bonds app.
No — the maximum holding is £50,000 per person. Couples can hold £100,000 between them. Children under 16 can also hold premium bonds (purchased by an adult on their behalf) with the same £50,000 maximum.
Premium bonds are highly liquid — you can cash them in at any time and receive your money within a few working days. There is no notice period and no penalty for early withdrawal, which makes them a useful emergency fund vehicle as well as a savings tool.
Premium bonds can serve as an emergency fund — they are safe, accessible, and tax-free. The trade-off is that in any given month you might earn nothing. If certainty of return matters (for example, to meet a specific savings goal), a high-interest easy-access account offers guaranteed interest. Our Emergency Fund Calculator helps you determine the right emergency fund size for your circumstances.
Enter your premium bonds holding and select how long to hold them. Premium bonds do not pay guaranteed interest — instead, each £1 bond is entered into a monthly draw. The prize fund is equivalent to an annual tax-free rate (the current prize fund rate is set by NS&I and reviewed periodically). The calculator uses the official prize fund rate and your holding to estimate your expected annual prize income on a probability basis. However, because prizes are random, any individual saver may receive significantly more or less than the expected return in any year. Premium bonds are most appropriate for higher and additional rate taxpayers who have used their ISA allowance and whose savings interest would otherwise be taxed — the tax-free prize equivalent rate compares favourably against taxable savings for this group.
Important Information
This calculator is provided for general information and planning purposes only. It does not constitute financial or tax advice and should not be relied upon as such. Figures are indicative estimates based on simplified, publicly available criteria and stated assumptions. Actual results depend on your full circumstances. See our Disclaimer for further information.