From the March draw you’ve obtained a decrease probability of profitable.
After some huge base charge will increase from the Financial institution of England that noticed the Premium Bond prize charge hit the best stage since 1999, they’re now on the best way down.
Right here’s what this implies to your probability of profitable, and the way it compares to the most recent greatest purchase financial savings accounts.
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What are Premium Bonds
Premium Bonds are successfully financial savings accounts held with the federal government. Somewhat than getting curiosity again in your financial savings, you might be entered right into a draw with a high prize every month of £1 million.
Different prizes range between £25 and £100,000 and if you happen to do win it’s all tax-free. You may learn extra about how they work right here.
The brand new Prize Price
From the March 2024 draw, the prize charge is 4.4%. That is down from the 4.65% charge set simply in September, which was the eighth improve in simply over a 12 months. Nevertheless it’s nonetheless the second highest charge we’ve seen in many years.
Regardless of the speed drop, the percentages of profitable are literally the identical. They’ll stay at 21,000 to 1. That is all the way down to there really being fewer prizes, roughly 72,000 much less (making a complete of 5.77 million accessible, down from 5.84)
The full prize fund may even lower, this time by an enormous £31 million (there’s now an estimated whole prize fund of £444 million). That is all the way down to the change in what number of of every prizes can be found.
The variety of £25 prizes will improve, up by greater than 400,000, however that’s on the expense of cuts on the different ranges.
There are 230,000 much less of every of the following stage prizes – £50 and £100. And there are smaller reductions for prizes between £500 and 100,000. There are nonetheless simply two £1 million prizes.
How a lot might you win?
Right here’s how the brand new elevated draw compares to the one firstly of June 2023. As you may see there are extra “greater worth” prizes, so if you happen to win you’re prone to win extra money than in earlier attracts, however you’re simply as prone to win a prize of some worth
| Worth of prizes | Quantity and whole worth of prizes in January 2024 | Quantity and whole worth of prizes in March 2024 (estimate) |
| £1,000,000 | 2 | 2 |
| £100,000 | 91 | 85 |
| £50,000 | 182 | 170 |
| £25,000 | 365 | 339 |
| £10,000 | 912 | 848 |
| £5,000 | 1,821 | 1,697 |
| £1,000 | 19,020 | 17,775 |
| £500 | 57,060 | 53,325 |
| £100 | 2,363,105 | 2,130,923 |
| £50 | 2,363,105 | 2,130,923 |
| £25 | 1,037,784 | 1,435,338 |
| Whole variety of prizes: | 5,843,447 prizes | 5,771,425 prizes |
| Whole prize fund: | £475,510,350 | £444,399,400 |
Earlier Premium Bond prize charges
- September 2023 – 4.65%
- July 2023 – 4%
- June 2023 – 3.75%
- March 2023 – 3%
- February 2023 – 3.15%
- January 2023 – 3%
- September 2022 – December 2022: 2.2%
- Might 2022 – August 2022: 1.4%
- December 2020 – April 2022: 1%
What you’ll in all probability win
It’s exhausting to offer an actual determine in your possible winnings as 4.4% on Premium Bonds doesn’t imply you get £4.4 again for each £100. That’s the common return you probably have common luck.
In actuality, it’s solely these with near the utmost £50,000 who’re prone to get near this charge (on common – it could possibly be kind of). Whereas these with lower than a grand are prone to win nothing in any respect. In order that they’re going to be higher choices for these with more money, and fewer good for these with smaller quantities.
The MoneySavingExpert Premium Bonds calculator often offers a great indication of the wins over a 12 months. Nevertheless proper now it’s displaying some odd outcomes, so it’s greatest averted for now.
And there’s a great probability you’ll get nothing. For the reason that smallest prize is £25, you’d assume you’d want £569 saved to get the bottom prize (£569 + 4.4% = an additional £25). However it’s not that straightforward.
With this charge, the percentages of a bond (not an individual) profitable one thing are 21,000:1. Meaning for each 21,000 bonds, just one bond will win a prize and 20,999 bonds received’t.
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How they examine to financial savings accounts
The very best paying easy-access financial savings account proper now with no restrict on the stability is from Metro, paying 5.22%. That’s higher than the Prize Price of 4.4%, and it’s a assured return on all balances.
And there are even greater paying choices with some restrictions. Santander pays 7% on as much as £4,000 on its Edge Saver (although it requires a present account) whereas the Common Saver from Nationwide affords 8% (although solely on £200 a month). These are possible higher bets to your preliminary deposits.
Plus, one-year fixes are nonetheless round 5.5% – so if you happen to don’t assume you’ll want the cash for a 12 months then these blow Premium Bonds out of the water.
Nevertheless it’s price noting that any prizes received through Premium Bonds are tax free. With rates of interest growing it could possibly be you’re nearer to going over your private financial savings allowance, so cash in Premium Bonds might make it easier to keep away from tax.
Or if you happen to’re a further charge taxpayer then it’s an choice as an alternative or in addition to ISAs.
What about future curiosity cuts?
There have been 14 successive rate of interest rises from the Financial institution of England between December 2021 and August 2023 – however they’ve stayed at 5.25% since then. And it’s possible we’ll see cuts to this base charge 2024.
If that occurs, it should imply most, if not all, financial savings accounts will react and transfer their charges down. Fastened charges have already dropped in anticipation.
This might imply that the highest quick access charges from the banks will drop under this new Premium Bonds prize charge. However in fact, NS&I might additionally then drop the prize charge for Premium Bonds once more.
Shopping for Premium Bonds
When to purchase Premium Bonds
If you happen to’re tempted by the elevated charge, there’s one essential rule it’s good to find out about. Your cash must have been held in Premium Bonds for a full month earlier than it’s entered right into a draw.
Meaning this March draw will solely be for anybody who saves previous to the top of January 2024. It additionally means it is smart to deposit cash proper on the finish of a month than at some other time.
Find out how to purchase Premium Bonds
You purchase PBs from NS&I web site or over the cellphone at a price of £1 every, however it’s important to purchase at the very least £25 price. You need to be over 16 years outdated to purchase Premium Bonds for your self. In case you are shopping for them for youngsters, the account shall be held by the mother and father/authorized guardians till the kid reaches 16.
