How Often Are Premium Bonds Drawn?

Finance and Money, Questions and Answers

Premium Bonds are a popular UK savings product offered by National Savings and Investments (NS&I), giving bondholders the chance to win tax-free cash prizes. But how frequently are these prize draws conducted, and how do they work? This article explains the draw schedule, prize structure, and how bondholders can find out if they’ve won.

1. How Often Are Premium Bond Draws Held?

Premium Bond draws take place once a month, on the first working day of each month. Every month, NS&I randomly selects winning numbers from the pool of active Premium Bonds, giving bondholders multiple chances to win based on the number of bonds they hold.

2. What Prizes Can Be Won in Premium Bond Draws?

Each month, NS&I distributes millions of prizes, ranging from £25 to £1 million. The top two prizes are £1 million, awarded to two lucky bondholders. Other prizes include £100,000, £50,000, and smaller amounts, with the odds of winning currently at around 1 in 21,000 for each £1 bond held.

Prize Tiers

£1,000,000 – Two winners per month
£100,000, £50,000, £25,000 – Multiple winners per month
£10,000, £5,000 – Mid-tier prizes
£1,000, £500, £100, £50, £25 – Smaller prize amounts

The draw uses an electronic random number generator, affectionately named ERNIE (Electronic Random Number Indicator Equipment), which has been ensuring fair and random selection of winning bonds since Premium Bonds began.

3. How Do Premium Bond Holders Find Out If They’ve Won?

NS&I notifies winners by mail, and bondholders can also check results online. Using the NS&I website or app, holders can enter their bond numbers to see if any of their bonds have been selected. Additionally, NS&I publishes a full list of winning bond numbers monthly, allowing for quick searches and peace of mind.

4. Benefits of Holding Premium Bonds

While Premium Bonds don’t earn traditional interest, they offer a unique opportunity for tax-free prize winnings. They are also government-backed, meaning capital is secure. Many bondholders appreciate the excitement of monthly draws, with the chance to win significant cash prizes.

Government Security and Flexibility

Premium Bonds are fully backed by the UK government, ensuring the safety of the invested capital. Additionally, bonds are flexible, allowing holders to buy, hold, or withdraw their funds at any time, making them a risk-free option compared to other types of savings.

5. Related Questions

1. What is ERNIE, and how does it work?

ERNIE (Electronic Random Number Indicator Equipment) is the technology used by NS&I to generate winning numbers for Premium Bonds. It uses quantum technology to ensure randomness, which has been the trusted method since Premium Bonds were introduced in 1956.

2. Can Premium Bond holders win more than once?

Yes, each £1 bond has an independent chance of winning in every monthly draw. So, if a bondholder has multiple bonds, each is eligible to win each month, increasing the likelihood of winning as bond numbers increase.

3. Are Premium Bond prizes subject to tax?

No, Premium Bond prizes are tax-free in the UK, making them a tax-efficient investment. This benefit is a significant attraction for many bondholders, as winnings remain untaxed regardless of the prize amount.