New Zealand markets closed
  • NZX 50

    +258.44 (+2.05%)

    -0.0002 (-0.03%)

    +102.00 (+1.34%)
  • OIL

    +0.45 (+0.62%)
  • GOLD

    +5.10 (+0.29%)

Premium Bonds: The real odds of winning

·2-min read
Premium Bonds: The real odds of winning
Premium Bonds are a lottery bond issued by the government's National Savings and Investments (NS&I) agency. Photo: Peter Dazeley/Getty

Premium Bonds offer holders the chance to win money in a monthly prize draw, but what are the real odds of winning?

Savers with £1,000 ($1,362) in Premium Bonds would have to wait almost 3,500 years for a 50/50 chance of winning the same amount they put in, new research has found.

To have a 50/50 chance of winning even £50 a saver who put in £1,000 would have to wait more than 200 years, according to data scientist Andrew Zelin.

National Savings and Investments (NS&I) Premium Bonds are a savings account you can put money into and withdraw when you want, where the interest paid is decided by a prize draw each month. 

Watch: Can You Game the System Using Premium Bonds?

Savers buy £1 bonds and each has an equal chance of winning, so the more you buy, the more your chance you have of winning.

Every month the winners are picked by an audited random number generator.

The top prize is £1m and the lowest is £25. Fewer than 100 of the monthly prizes are worth more than £5,000.

Read more: Are watercooler moments really so important in the workplace?

To have an equal chance of winning £1m, someone with £1,000 invested would have to wait 3.2 million years, according to Zelin, who analysed the data for the Family Building Society.

The same investor would have to wait two years for a 50-50 chance of pocketing just £25 or 3,466 years for the same shot at £1,000 or 119,256 years for a £10,000 prize.

Savers with the maximum £50,000 stake would still have to wait over 60 years for an even chance of winning £1,000 or 2,385 years for £10,000 and 64,398 years for the top prize of £1m.

"Savers need to know the true chance of winning," said Zelin.

The closest thing Premium Bonds have to an interest rate is their annual prize rate, which currently stands at 1%. The interest rate describes the "average" payout, but it is just a "vague watermark", according to

NS&I said: "Each £1 Bond has an equal chance of winning a tax-free prize in each monthly Premium Bonds prize draw. The chance of each £1 Bond winning a prize does not change if customers hold their Bonds for longer, with the odds currently fixed at 34,500 to 1 and the prize fund rate currently at 1%. The prize fund rate and odds are subject to change."

NS&I is government-owned and has been selling Premium Bonds since 1956.

Watch: Will interest rates stay low forever?

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting