How Premium Bonds Prizes Are Drawn and Paid

Premium Bonds work differently from an ordinary savings account. Instead of paying interest, each £1 Bond you hold is entered into a monthly prize draw, and the prizes run from £25 up to £1 million, tax-free¹. Two £1m jackpots are won every month, and many more people win smaller amounts³.

The prize fund rate is 4.35% a year, variable, from the September prize draw². That is the rate used to work out how much prize money goes into the draw each month, not a rate paid to you. Your own return depends entirely on what your Bonds win, and most Bonds win nothing in any given month.

If you do win, NS&I tells you by email or text message, provided your contact details are up to date and you have chosen one of those options⁵. Prizes are paid straight into your bank account or reinvested into more Bonds⁶. The rest of this page covers how the draw works, how to make sure prizes reach you, and how to tell a real prize notification from a scam.

The monthly draw: every £1 Bond gets a chance

Each £1 Bond you buy has its own Bond number, and it is that number which goes into the monthly draw⁷. Hold £25 and you have 25 numbers in the hat. The draw takes place every month, and the prizes on offer run from £25 up to £1 million².

The odds quoted are per £1 Bond, not per person. NS&I states odds of 21,000 to 1 for every £1 Bond in the monthly prize draw, variable, from the July 2026 prize draw². Before that, the published figure was 23,000 to 1, variable, until the June 2026 prize draw². The change reflects the higher prize fund rate: more money in the pot means better odds.

There is a waiting period. NS&I says you need to hold your Bonds for a whole month before they are eligible for the prize draw², so Bonds bought in one month first go into the draw the month after.

The draw is not a single pool of identical prizes. NS&I splits prizes into three value bands, higher, medium and lower, and allocates a percentage share of the monthly prize money to each⁵. That is how the structure produces a small number of very large prizes and a very large number of £25 prizes. In the October 2025 draw, 6,049,850 prizes were paid out⁸.

Prize fund rate: 4.35% for the September draw

The prize fund rate is the headline number people watch, and it is not set by NS&I. NS&I states that its interest rates and the Premium Bonds prize fund rate are set by HM Treasury and may change from time to time⁹. The rate is variable, so it can move in either direction, and it has moved more than once.

The current figure is 4.35% a year, variable, from the September prize draw². It appears at that level across NS&I's own product pages, including the pages for Income Bonds and Green Savings Bonds, which is a reminder that the same rate is quoted wherever NS&I describes the Premium Bonds prize fund¹⁰.

What the rate does not mean is that you earn 4.35%. It is the rate at which the prize fund is funded, spread across all eligible Bonds. A holder with average luck over a long period might see a return in the region of the prize fund rate, but the distribution is heavily skewed: most Bonds win nothing in most months, and a small number win large amounts. The rate is also the reason the odds change, since a bigger fund supports more or larger prizes.

Because the rate is variable and set by HM Treasury, it can be cut as well as raised. Anyone holding Premium Bonds for the long term should expect the rate and the odds to change over time, and should treat any single month's figure as current rather than fixed.

Prize notification by email or text message

NS&I offers two ways to be told about a win: by email or by text message⁵. If your prizes are paid into your bank account or reinvested into more Bonds, NS&I says it will let you know by text or email if you win⁵. You choose which of the two you want, and you can change it.

Each option has a requirement. If you have selected text, you need to provide a UK mobile number. If you have selected email, you need to provide an email address¹². That is worth knowing if you move abroad or change your mobile number, because a notification sent to a number you no longer use will not reach you.

There is a separate step for the largest prizes. NS&I states that if you win £25,000, £50,000 or £100,000, it will send you a claim form, which you must complete and send back before the prize can be paid². So the very largest prizes, short of the £1m jackpot, are not simply credited: they need a form returned first.

You can also check for yourself rather than waiting to be told. NS&I's prize checker shows any prizes won this month, anything won in the previous six draws, and any older unclaimed prizes⁵. It is updated on the day after the first working day of each month⁵. To use it you need your holder's number, which has either 9 or 10 digits, or 8 digits followed by a letter⁵. If you do not have it, you can find it by logging in to the online service and checking your Premium Bonds account page, or by calling for a replacement Bond record¹³.

Keeping your details up to date so prizes reach you

A prize that NS&I cannot tell you about, or cannot pay, is the most common practical problem with Premium Bonds. The fix is to keep your contact and payment details current, and NS&I makes this straightforward for registered customers.

To change how you receive prizes, go to 'Your profile', then 'Prize options', choose how to receive prizes and how to be contacted, then click Save to finish¹⁴. If you are already registered for NS&I's online banking service, you need to log in to change how you receive prizes. If you are not registered, you can change it without registering⁶.

The options themselves are simple. NS&I can pay prizes directly to your bank account or reinvest your prize money into more Bonds⁶. Reinvesting means the prize buys more Bonds, which then have their own Bond numbers and their own chance in future draws.

There is a limit that matters here. Any Premium Bond numbers that go over the £50,000 limit are not eligible to win prizes. If a number beyond the limit is drawn, and a prize paid in error, NS&I has the right to reclaim it². So reinvesting prizes indefinitely is not a way round the holding limit: once your holding reaches £50,000, further Bonds cannot win.

If you have come across some old Premium Bonds, you can write to NS&I to get them added to your online account¹³. That is useful where Bonds were bought years ago, perhaps as a gift, and never linked to your current record.

Merging holdings and correcting records by letter

Some changes cannot be made online. NS&I states that changing your or your child's name, or using the post, requires downloading and sending a paper form¹⁵. Name changes and postal requests therefore run on paper rather than through the online account.

The same applies to merging holdings. If you hold Premium Bonds under more than one holder's number, perhaps because Bonds were bought for you as a child or bought at different times, writing to NS&I is the route to getting them added to your online account¹³. Once they are on one record, they appear in one place and count towards the same £50,000 limit.

There is a separate set of forms for different NS&I accounts. NS&I says it has specific forms for each of its accounts, except Premium Bonds and its Investment Account, which require the general application form¹⁶. So if you are dealing with Premium Bonds alongside another NS&I product, expect to use different paperwork for each.

Identity checks sit behind all of this. NS&I says it is required by law to check your identity and address when you apply to invest with it or register for its online and phone service, and possibly at other times to keep records updated¹¹. That is why a record correction may involve producing documents rather than just a phone call.

Premium Bonds can be applied for and cashed in online, by phone or by post², so there is a route for people who prefer not to use the online service at all. If you are tracing Bonds you think you may have lost track of, there is a separate process for tracing lost NS&I savings and Premium Bonds.

Scam messages about prizes and where to get help

Prize draws are a favourite cover for scams, because a message saying you have won something is exactly what a real prize notification looks like. The difference is in what the message asks you to do.

The warning signs are consistent across the guidance. Scam post often shows bad spelling, a prize that is too good to be true, a general address such as a PO Box, a request to send money to claim the prize, and watermarks such as the word win, barcodes, seals or codes¹⁷. A common lottery or prize draw scam is a letter congratulating you on winning a cash prize, with no prize given, and a request to call a premium rate number or pay fees to release the prize¹⁸. Premium rate numbers usually begin 090¹⁹. You may be asked to call a premium rate phone number to collect a prize²⁰.

The Financial Services Register puts it plainly: if you have been contacted unexpectedly about an opportunity, it is likely to be high risk or a scam²¹. Other guidance points to the same red flags in written approaches: whether they want a referral fee, whether they want a large lump sum, and whether they are asking you for personal details such as bank account or card details²².

If you receive a suspicious text message, you can report it free of charge by forwarding the message to 7726²³. Suspicious text messages can also be forwarded to 60599, charged at your network rate²⁴. If you have lost money, the place to start is your bank, and there is more on how these scams work and how to get money back in savings and fake bond scams.

Where protection starts and stops

Premium Bonds sit outside the usual savings protection framework because NS&I is backed by HM Treasury. That backing is the reason NS&I accounts are not covered by the Financial Services Compensation Scheme in the ordinary way, and it is also why the prize fund rate is set by HM Treasury rather than by the provider⁹.

That protection has limits of its own. Premium Bonds cannot be passed on when the holder dies: instead they must be cashed out by the executor, or left for another 12 months²⁵. So they do not work like an investment that can simply be inherited in place.

The £50,000 holding limit is a hard boundary. Any Premium Bond numbers above it are not eligible to win prizes, and if a number beyond the limit is drawn and a prize paid in error, NS&I has the right to reclaim it². That applies whether the excess arose from a lump sum or from reinvested prizes.

For anyone weighing Premium Bonds against an ordinary account, the trade-off is straightforward: a savings account pays a stated rate, while Premium Bonds pay nothing at all unless you win. There is a fuller comparison in Premium Bonds vs a savings account, and the mechanics of holding them are set out in How Premium Bonds work.