Alternative prize-linked savings And some alternatives claim to have much better odds of winning prizes than NS&I Premium Bonds. For example, the Family Building Society's Windfall Bond claims to have odds that are around six times better than NS&I Premium Bonds.
While Cash ISAs and Premium Bonds are very low-risk, they are unlikely to offer high returns. If you're happy to take more risk for the possibility of better returns, then a Stocks and Shares ISA might be better for you.
Chip. Chip is a savings and investment app, which runs its own version of Premium Bonds. It's a similar gimmick, in that no interest is paid on the money set aside in its Prize Savings Account.
Premium Bonds and Cash ISAs are better for those who don't need to access their savings immediately and don't want to take on too much risk. If you are comfortable with not generating a regular return and you'd like the opportunity of winning a tax-free prize, then it could be better to pick Premium Bonds over an ISA.
Each £1 placed into Premium Bonds has an equal chance of getting a prize, so the more savings you have, the more chance you have of winning. Martin emphasised that Premium Bonds won't pay out much more on average than the interest on easy access or fixed rate savings accounts.
If you want instant access to your cash, have £50,000 to invest, and especially if you pay higher rates of tax they are good value, returning on average around 2pc a year tax-free. But it is a close-run thing as market rates from banks and building societies are rising rapidly. Premium Bonds work like this.
If you want a regular income, Premium Bonds may not be the best option for you - you may be better off looking at different types of investment or savings accounts, including isas. You'll also receive no interest, as the interest accrued on bonds goes towards the prize fund.
Series I Savings Bonds
If you want to fend off inflation as well as earn an interest rate, check out Series I bonds. These safe investments are designed to protect your money from losing value due to inflation, since the Treasury adjusts your interest rate every six months to keep pace with rising prices.
Are my old Premium Bonds still valid? Yes. As long as you haven't cashed your Bonds in, they're still valid and they're still being entered into our monthly prize draws.
If the value of the premium bonds is under £5,000 and you have the premium bonds account details, then you may be able to withdraw the money online. If the investment is over £5,000 then you may need to supply a grant of representation (proof of probate) to National Savings & Investments.
The odds of winning with each £1 bond number will remain the same at 24,000-1 but NS&I has beefed up the number of higher-value prizes and reduced the number of £25 ones.
Normally, you're limited to purchasing $10,000 per person on electronic Series I bonds per year. However, the government allows those with a federal tax refund to invest up to $5,000 of that refund into paper I bonds. So most investors think their annual investment tops out at $15,000.
Stocks and Mutual Funds
Many millionaires and billionaires made their money — at least in part — by investing in the stock market, or by owning stock in companies they started or worked for.
The value of fixed income securities will fluctuate and, upon a sale, may be worth more or less than their original cost or maturity value. Bonds are subject to interest rate risk, call risk, reinvestment risk, liquidity risk, and credit risk of the issuer.
Dealing with Premium Bonds after someone's death
Assets are generally sold or encashed during the administration period, although some can be transferred to beneficiaries who wish to keep the holding. With Premium Bonds however, there is no option to transfer them.
The quickest way to find out if you've won a prize is to use our prize checker. It'll show you this month's prizes, anything you've won in the previous six draws, as well as any older prizes that you haven't claimed yet.
Bonds are often touted as less risky than stocks—and for the most part, they are—but that does not mean you cannot lose money owning bonds. Bond prices decline when interest rates rise, when the issuer experiences a negative credit event, or as market liquidity dries up.
One in a million
Our Agents Million have the important task of delivering the winning news in person to the two monthly jackpot winners. Since the first Premium Bonds millionaire in 1994, over 400 new millionaires have been paid a visit.
Straight to your bank account
If you win, we'll let you know the good news by email or text message. You'll then normally receive your prize money in your bank account by the 7th working day of the month.