Exploring Options Beyond Premium Bonds: Is a Savings Prize Draw from Other Sources Worth Considering Due to NS&I's Lower Rates?
National Savings and Investments (NS&I) Premium Bonds, a popular savings product in the UK, have seen their equivalent returns and prizes decrease recently, with the prize rate falling in April 2025. The declining rates are due to lower interest rates set by the Bank of England and Treasury-backed rules limiting competition with the broader savings market.
Premium Bonds offer the chance to win cash prizes, including the million-pound jackpot each month. However, the latest cuts have left some savers seeking alternatives. Fortunately, there are other savings products that could offer more lucrative returns. Some providers have launched prize draw accounts, with draw opportunities providing chances to win up to £100,000.
Savings prize draws operate similarly to Premium Bonds. Account-holders are entered into a monthly draw, with each provider setting its own eligibility rules, draw frequency, and payout rates. Some prize draws offer savings interest, while others pay out the prize alone. It's important to note that most Premium Bonds holders never win a prize, so those who are not primarily focused on a guaranteed return might find these prize draws appealing.
Here are some top alternatives to Premium Bonds currently available:
- Halifax Savers Prize Draw - win up to £100,000Halifax offers a prize draw with a top prize of £100,000, with 1,603 winners each month. To qualify, account-holders must maintain £5,000 or more in qualifying accounts for an entire calendar month. All Halifax savings accounts and ISAs, plus most Bank of Scotland-branded savings accounts, are eligible.
- Chip Prize Savings Account - win up to £75,000Chip offers the second-highest jackpot, with a chance to win up to £75,000. One saver each month takes the top prize, and there are additional prizes worth £10 available. With Chip's Prize Savings Account, there is no interest earned on deposits; instead, the money deposited counts towards entries in a monthly prize draw.
- Family Building Society - win up to £50,000Family Building Society offers a Monthly Free Prize Draw with a jackpot of £50,000 and smaller prizes. New and existing customers can participate, and the value of prizes is determined by the total value of Windfall Bonds entered into the previous month's free prize draw.
- Credit Union PrizeSaver - win up to £5,000The Association of British Credit Unions manages the PrizeSaver draw, a monthly prize draw with a top prize of £5,000. The draw is open to credit union members, with one PrizeSaver account per individual. The frequency of the draw may vary, with some credit unions offering monthly draws while others provide quarterly draws.
Individuals seeking alternative savings products can compare the various options based on prize amounts, eligibility requirements, and returns. It's essential to understand the likelihood of winning a prize and the potential risks involved before choosing a savings account. While Premium Bonds offer high-value, frequent prizes and broad eligibility, most people will not realize returns close to the advertised prize fund rate. Alternative prize draw accounts from banks and credit unions provide lower top prizes but can attract customers who are already banking with those providers. All of these accounts are risk-free in terms of capital but may offer unpredictable actual returns.
- For those seeking alternatives to the declining returns of Premium Bonds, Halifax's Savers Prize Draw offers the chance to win up to £100,000, with 1,603 winners each month, provided one maintains £5,000 or more in qualifying accounts for a calendar month.
- Another option is the Chip Prize Savings Account, with a top prize of up to £75,000, offering a different approach, as deposits contribute to entries in a monthly prize draw rather than earning interest.
