They keep your money safe and offer two chances to win a million pounds every month tax free – so how do you actually buy Premium Bonds
There are two guaranteed £1million winners every month, guaranteed(Image: GETTY)
An incredible 21 million people in Britain have Premium Bonds – making them the country’s favourite place to stash cash, by far.
You can see why; in the May 2018 draw alone , an incredible 3,043,434 prizes were handed out – with two women walking away with cheques for a life-changing £1million.
Overall, National Savings & Investments (NS&I) pays out 1.4% of the total amount saved in Premium Bonds every year, higher than the 1.31% offered by the current best-buy instant access account .
But this is payed out as prizes, rather than as standard, with electronic random number generator ERNIE selecting the winning bonds each month.
The odds aren’t fantastic – at 24,000 to one – but given you can invest between £100 and £50,000 in total, you can bring those odds down considerably. That’s because every £1 you invest buys a unique Bond number with a separate and equal chance of winning in a monthly prize draw.
On top of that, any prizes you win are completely free of income tax and capital gains tax.
So if you’re interested, this is how you can buy Premium Bonds.
Who can buy Premium Bonds
Premium Bonds – are you a big winner this month?(Image: PA Wire)
Anyone aged 16 or over can buy them. You can also buy Premium Bonds from abroad, but only in some countries.
Parents, legal guardians, grandparents and great-grandparents can invest on behalf of their child, grandchild or great-grandchild aged under 16.
However, you’ll need to nominate a parent or legal guardian to be in charge of the Bonds until the child is 16 – they will be sent the Bond record, any prizes won and any payments for cashed in Bonds.
The 4 ways to buy Premium Bonds
(Image: NS&I)
Whether at home or abroad, there are four main ways to buy Premium Bonds:
- Online – You can buy Premium Bonds online using NS&I’s secure online system .
- By phone – You can call all day, every day. Call NS&I free from the UK on 08085 007 007. Call+44 1253 832007 from outside the UK (charges will be at the rate of your international phone provider). Have your bank card details ready when calling.
- By post – To buy Premium Bonds by post, complete an application form and send it in with a cheque payable to National Savings & Investments. Print and complete an application form .
- Bank transfer or Standing Order – Existing customers can also buy by bank transfer and standing order. Each investment must be at least £100, or £50 for bank transfers and standing orders.
When you apply you’re advised to have a UK debit card in your own name and your Premium Bonds holder’s number – if you already hold Bonds and your NS&I number and password if you are registered for its online and phone service.
After you apply
Have you checked to see if your premium Bond has won this month?(Image: NS&I)
There are a few things NS&I does before your application is cleared and your Premium Bond record sent out.
If everything goes smoothly, the date of your Premium Bonds will be the same as the date NS&I received your application.
But first they must check your identity and address – which is normally done electronically. They also sometimes send a confirmation form to sign and return.
Once they have the confirmation and any other documents asked for, your Bond record is sent out (either by post or by email) along with confirmation of your NS&I number, and a temporary password if you haven’t already chosen one.
That will let you use NS&Is online and phone service in the future, although you can still deal with them by post.
If you’re already an established customer and have registered for our online and phone service, they just send you your Bond record over email.
Buying for children, grandchildren or great-grandchildren
You can buy Premium Bonds for under 16s too(Image: NS&I)
Premium Bonds can be given to your child, grandchild or great-grandchild as a present as well as bought for yourself.
Until the child’s 16th birthday, the parent or guardian nominated on the application must look after the Bond, regardless of who buys it.
Confirmation of any transactions made, prizes won and payment for cashed in Bonds before the child turns 16 will be sent to the nominated parent or guardian.
Grandparents and great-grandparents can only apply by post.
Looking after your Premium Bonds once you have them
Have you checked to see if your Premium Bond has won this month?(Image: NS&I)
Once you’ve bought them, you can manage your Premium Bonds online and by phone.
Using the registration details sent out with your Bond confirmation, you can register or log in to NS&I.com or call them to check your balance and transactions, including any prizes you’ve won.
You can also give instructions by post.
You get sent a confirmation every time you buy or cash in Bonds.
Everyone who owns Premium Bonds also gets a holder’s number.
This links all the Premium Bonds you have and you need to quote it when you buy more Bonds, cash in or have a query. It’s different to your NS&I number.
If you win, you’ll be sent an email and can have the money either paid into your bank account or automatically re-invested in more Premium Bonds.
You can also use the free prize checker app available from the App Store or Google Play to see if you’ve won.
For prizes of £5,000 and more, you will be sent a claim form before the money is paid out or reinvested.
And if you scoop a jackpot, NS&I’s ‘Agent Million’ representative will visit you in person.
Who are Premium Bonds good for
They’ve been going for 60 years(Image: PA)
Premium Bond’s aren’t for everyone. This is NS&I’s guide on who should and shouldn’t buy them.
Suitable for savers who:
- Want the chance every month to win a £1 million jackpot and other tax-free prizes
- Have £100 or more to invest
- Want 100% security for their money
- Want to make the most of tax-free investment opportunities
Not for savers who:
- Want a regular income
- Are looking for guaranteed returns
- Are concerned about inflation eroding their savings
- Want to buy them as a gift, unless for their child, grandchild or great-grandchild
For more advice on where to keep your money, see our guide on best savings accounts .