- Experts highlight Premium Bonds as a unique savings option that combines the thrill of a lottery with the security of government backing. While the potential for a £1 million prize is enticing, they caution that returns may lag behind inflation and suggest that long-term savers might find better alternatives in stocks and shares ISAs. The overall rating of 4.6/5 reflects strong scores in safety and customer service, though access and interest rates are noted as areas for improvement.
- Across 17 user reviews on Good Money Guide, averaging 4.3/5, customers frequently appreciate the safety of their capital and the excitement of monthly prize draws, with many reporting consistent winnings. However, some users express frustration over the long wait for returns and the perception that the odds of winning are not favourable, particularly for those who have held bonds for extended periods without success.
Premium Bonds Expert rating
Our expert rating is the average of the areas listed here, each scored out of 5 by our team.Our experts have rated Premium Bonds across five key areas of our review framework.
- Interest Rates4.0
- Access4.5
- Safety5.0
- Prizes5.0
- Customer Service4.5
Pros
- £1m prize potential
- Government-backed
- Easy access
Cons
- Potentially better returns in the stock market
- One-month ownership needed before entry to the prize pool
- Worse than inflation savings average returns
See full expert review
Our verdict
Premium Bonds a bit like the lottery, but you get your money back, a government-backed, prize-draw-based savings account where you can win up to £1m every month, tax-free. They are an excellent and safe way to save for a rainy day in the short term, with the potential to win a life-changing amount of money. However, for longer-term savers, you can get better returns with savings platforms or investment accounts.
Is it worth buying Premium Bonds?
Yes, Premium bonds are like the lottery, but you get your money back if you don’t win. If you don’t want to lose money and are happy to sacrifice lower than inflation returns in the hope of winning £1 million, Premium Bonds are a great way to save in short to medium term as your money is guaranteed by the Government.
Interest Rates: The currency premium bond interest rate equivalent is around 4.35%, which is pretty good considering the Bank of England base rate is 3.75%. However, this is not as good as potential investment returns if you put your money in a tax-free stocks and shares ISA instead. You can also invest more in an ISA over time as ISA contribution limits are £20k per year as opposed to an overall limit of £50k for Premium Bonds.
Prizes: At current odds of 21,000 to 1 per £1 bond, the odds obviously aren’t great, but then the prospect of winning £1m make them interesting for those that like to dream a little.
Access: It takes a few days to get your money back, especially towards the end of the month, as sometimes they delay withdrawals until the next draw has passed. So if you need to get your money back, allow a couple of days. But generally the process is easy and online.
Safety: Premium Bonds are government-backed, so perfectly safe. You will never get less back than you put in. Except if you look at it in real terms and never win a prize, as inflation will eat away at the value of your money.
Customer Service: Excellent customer service whenever I have had to phone them up. Especially considering they are a Government product where you would expect woeful bureaucracy and unnecessary administration. Every time I’ve had to phone them up, I’ve got through to someone who can help and knows what they are talking about.
Premium Bonds Customer reviews
Customer ratings come from reviews left on this site. Every review is read and approved before it is published.Based on 17 reviews
- Excellent65%
- Very good12%
- Basic18%
- Poor0%
- Bad6%