What are prize savings accounts?
Prize savings accounts are savings accounts where you can win a big cash payout instead of receive regular interest on your cash. We have compared the best savings accounts that offer prizes instead of interest payments.
The most famous of these is National Savings & Investment’s (NS&I) Premium Bonds, but now several banks are offering big prizes too. So, should you be considering ditching interest rates in favour of the chance of a big prize?
Prize savings bonds are just like a traditional savings account. You deposit your money with a bank or building society and can withdraw your money according to the terms of the account.
The big difference is these bonds often don’t pay you any interest, instead you are entered into a monthly prize draw.
More and more banks and building societies are offering prize savings bonds as it is cheaper for them to pay out a few big prizes than pay everyone a market-beating interest rate. But, what’s in it for you?
When considering a prize savings bond you need to look at:
- What the prizes are and how often they are paid
- What are your chances of winning
- Whether you will be paid an interest rate as well
Compare prize savings accounts
| Prize Savings Account | Top Prize | Minimum Deposit | Equivalent Interest Rate | Odds of Winning |
| NS&I’s Premium Bonds | £1,000,000 | £25 | 4.40% prize fund rate | 21,000 to 1 per £1 bond |
| Nationwide’s Savings Prize Draw (“Start to Save”) | £100 | £100 | 1% | Varies from 1 in 34 to 1 in 67 |
| The Halifax Savings Prize Draw | £100,000 | £5,000 | Varies | Varies monthly based on participants |
| Family Building Society’s Windfall Bonds | £50,000 | £10,000 | 5.25% | 714 to 1 |
NS&I’s Premium Bonds
- Top Prize: £1,000,000
- Minimum Deposit: £25
- Chances of Winning: 21,000 to 1 for each £1 bond
- Equivalent Interest Rate: Prize fund rate is 4.40% as of March 2024
NS&I Premium Bonds are very popular, with over 22 million holders. They offer two £1 million prizes each month along with numerous smaller prizes. The money is 100% secure as it is backed by HM Treasury, and you have easy access to your funds without penalties
Nationwide’s Savings Prize Draw “Start to Save”
- Top Prize: £100
- Minimum Deposit: £100
- Odds of Winning: Varies from 1 in 34 to 1 in 67 depending on the total amount saved
- Interest Rate: 1%
This account is aimed at those looking to build a savings habit. You need to deposit between £50 and £100 each month to qualify for the quarterly prize draw
The Halifax Savings Prize Draw
- Top Prize: £100,000
- Minimum Deposit: £5,000
- Odds of Winning: Varies monthly based on the number of participants
Unlike other prize accounts, the Halifax Prize Draw isn’t tied to a single account. Holding at least £5,000 across qualifying Halifax or Bank of Scotland accounts qualifies you for the draw. You can earn interest on your savings while having a chance to win prizes. Registration is required for participation.
Family Building Society’s Windfall Bonds
- Top Prize: £50,000
- Odds of winning: 714 to 1
- Minimum investment: £10,000
This account offers a chance to win monthly prizes while earning interest. However, a 35-day notice is required for withdrawals.
Are savings prize draws worth it?
Even with high-interest rates at the moment you can still win big and even average winnings could beat the best interest rates.
Whether it is worth it is entirely up to you. The main advantage is that you won’t lose money as you do on the lottery, but you will also earn less than high-interest paying savings accounts if you don’t win anything. But if you do win, you will win big!
Some people are happy to forego a small amount of interest for the dream of winning a big cash prize, whereas others will choose the certainty of an albeit low interest rate over the potential of no return at all if you fail to win.
There are other ways you can increase the return on your savings, but these do involve taking more risk with your money.
You could look at investing some of your returns instead as, historically, investing in the stock market has outperformed cash.
What are the best alternatives to savings prize draws?
| Savings Platform | Highest Interest Rate | Savings Accounts | Minimum Deposit | FSCS Protected | GMG Rating | More Info |
|---|---|---|---|---|---|---|
 | 4.85% | 17 | £1,000 | ✔️ | See Rates | |
 | 4.9% | 64 | £1 | ✔️ | See Rates | |
 | 4.65% | 1 | £1 | ✔️ | See Rates | |
 | 4.88% | 67 | £10,000 | ✔️ | See Rates |
If you’d rather receive a guaranteed interest rate than take a chance on winning big, then one alternative is to use Hargreaves Lansdown’s Active Savings account which lets you switch between the best savings accounts without having to open lots of different accounts.
You may also be interested in these other types of savings accounts:
