Long considered one of the nation’s most popular savings products, National Savings & Investments (NS&I) Premium Bonds may be starting to lose their shine.
Recent cuts to the prize fund rate, worsening odds of winning, and the revelation that NS&I lost track of customers’ savings have prompted questions about whether Premium Bonds still offer value.
Rather than paying guaranteed interest, Premium Bonds offer savers the chance of winning a tax-free cash prize of between £25 to £1m. However, since April, the odds of winning have lengthened from one in 22,000 to one in 23,000.
The prize fund rate – which determines the total value of prizes paid out – has also fallen from 3.6pc to 3.3pc. As this reflects an average across all Premium Bond customers, rather than an individual return, many savers will earn less, with some winning nothing at all.
Here, Telegraph Money compares alternative prize draw accounts from other providers, all of which are linked to savings accounts, to see how they measure up.
Chip Prize Savings Account
What you can win: Chip’s monthly prize draw gives savers the chance to win a range of prizes, with the top prize typically standing at £10,000 (however, the grand prize for March’s draw was far larger, at £250,000).
For April’s draw, prizes include one grand prize of £10,000, seven prizes of £500, 73 prizes of £100, 180 prizes of £20, 360 prizes of £10 and 14,400 prizes of £5.
Odds of winning: Chip says it can’t be exact with the odds of the next draw as it depends on how many people enter and the number of prizes. However, the average odds of winning per entry during January to September 2025 were one in 964.
How to enter: To be in with a chance of winning, you must open a Chip Prize Savings Account. Instead of earning interest on your cash, you’ll be entered into the prize draw each month, provided you have at least £10 in your account; £10 equates to one entry. You can deposit up to £85,000, and withdrawals are unlimited.
The number of entries you get is decided by your average balance over the calendar month. This is calculated by adding up your daily balance and dividing it by the number of days in the month. The earlier you deposit money into your account, the more entries you get.
There are no restrictions on withdrawing your money, your cash is covered by the Financial Services Compensation Scheme (FSCS) up to £120,000 per person, and any winnings are tax-free.
Eligibility and restrictions: To apply for the Chip Savings Account and enter the draw, you must be a UK tax resident aged 18 or over.
How often the draw takes place: Each month.
Credit Union PrizeSaver
What you can win: Credit Union’s PrizeSaver prize pot is split into 21 monthly prizes of up to £5,000. There’s one prize of £5,000, 10 prizes of £50 and 10 prizes of £20. Winnings are tax-free.
Odds of winning: Because the total number of tickets in the draw changes every month as more people join or save more, the exact odds fluctuate.
How to enter: You’ll need to open a PrizeSaver account with a participating credit union. According to the PrizeSaver website, the account is offered by 21 participating credit unions. To find your nearest one, or one that corresponds with your occupation, use PrizeSaver’s search function.
Every £1 you hold in your account enters you into the prize draw, and you can have up to 200 entries per month. You can withdraw your money at any time, and your savings are covered by the Financial Services Compensation Scheme (FSCS).
Eligibility and restrictions: You can open a PrizeSaver account if you’re aged 18 or over and a resident of England, Wales or Scotland. You must also be a member of a participating credit union, which usually means meeting its own set criteria, such as living or working in a certain postcode. Note that not all credit unions offer PrizeSaver accounts.
How often the draw takes place: Between the 15th and 20th of each month.