In a week, your chances of winning the jackpot on the National Lottery are one in 45 million, vastly outnumbering the one in more than 56 BILLION chances of becoming a millionaire with a single Premium Bond. Of course, the more bonds you have, the better your chances of winning are.
Has anyone ever earned a million dollars by playing premium bonds?
Hannah won the £1 million jackpot for the first time in August 2004. Her winning Bond, 50HXH949682, was purchased with a £3,000 investment in February 2003.
“On a Sunday afternoon, Agent Million arrived. It had a significant impact on my life. When I found out what I’d earned, I almost passed out. I was completely taken aback.
“I was living on a £108 pension a week before I won, so you can imagine how much that altered my life.” I acquired a house and immediately invested the maximum amount (in Premium Bonds). I still earn £50 a month, and to be honest, those victories give me almost as much pleasure.
“I’ve only informed a few people, just those who could share the secret while remaining normal.” I do occasionally tell others that I’m having a great time thanks to ERNIE.”
Is it possible to earn a million dollars every month by purchasing premium bonds?
We divide the awards into three value bands: greater, medium, and lower, and each band receives a percentage of the monthly prize fund.
Higher value band
Every month, we award two £1 million prizes. The remaining prize fund portion allotted to the higher value band is then divided equally among the remaining reward values. We begin by calculating the total number of £100,000 prizes. We carry over any balances that are less than half of the prize amount to the split for the £50,000 awards. Alternatively, if there is a balance of at least half the prize value, we grant an additional £100,000 prize. We accomplish this by deducting the shortfall from the £50,000 prize pool.
The numbers of other awards in this value bracket are then calculated in the same way, from highest to lowest value. Any surplus or shortage is added to or subtracted from the medium value range for computing the number of £5,000 prizes.
Medium value band
We determine the number of prizes based on the share of the prize cash allotted to this band, with one £1,000 reward for every three £500 prizes. Any surplus is transferred to the lower value band’s share.
Lower value band
The amount of lower-value prizes is calculated so that there are equal numbers of £100 and £50 prizes, and the total number of prizes (including £25 prizes) is equal to the number of eligible £1 Bond units divided by the odds.
Prize draw details
The table below displays the projected number of prizes of each value for the February 2022 draw, as well as the volume and value of the individual prizes for the January 2022 draw.
Is it possible to win premium bonds?
Premium Bonds do not have an interest rate like most savings products; instead, they have an average rate of return.
The chances of winning a prize for a £1 bond are 34,500 to one, which is quite slim. This equates to a 1 percent “reward rate” (down from 1.4 percent last year).
- If you don’t win any Premium Bond awards, a low-interest savings account would have been a better option.
- The more Premium Bonds you hold, the better your odds of winning are (this is not reflected in the 1 percent prize fund rate, which is just an average for everyone)
Is buying premium bonds in bulk better?
Q I have £27,000 in premium bonds that were issued in blocks of £2,000 and £1,000, and my winnings have been poor (£600 in the last three years).
Could you kindly tell me whether there is any evidence that holding one entire block rather than having them divided up as they are now would be better? I realize that if this is asked, it can be done, but I will forfeit one month of participation in the drawing.
A There are numerous theories. There is no evidence, however, that owning premium bonds in a single block increases your chances of winning. Otherwise, it would have become well known very quickly.
The R in ERNIE denotes a ‘random’ (Electronic Random Number Indicator Equipment) selection of the winning numbers, which has been the case since the inaugural draw in 1997. Each month, ERNIE is designed to select 2.5 million numbers, which are subsequently matched to 1 million eligible bonds (many of the numbers include bonds not yet sold or those which have been cashed in).
Since the introduction of the national lottery, premium bonds have grown in popularity to the point that total holdings are now about £25 billion, making the odds of winning the single £1 million top prize astronomical. The average payout is set at 3.2 percent net, but this covers all of the rewards given out, implying that the government is borrowing money at a low rate.
The fact that the earnings are tax-free on an investment where you can always get your money back is a major selling point. Unlike the lottery, which is a zero-sum game. You could sell your bonds and then buy them back to cover consecutive numbers. However, as you point out, this will cost you a month in the draw and will not increase your chances of winning. Don’t get too down on yourself. It appears that investors frequently receive nothing or very little for long periods of time before experiencing a run of excellent fortune.
What is the most you can spend on Premium Bonds?
If it is discovered that Premium Bond winners have invested more money than is allowed, their winnings may be taken away.
The largest amount you may invest in Premium Bonds right now is £50,000, with a minimum contribution of £25.
Premium Bonds are a type of savings product offered by National Savings and Investments (NS&I) that differs from traditional savings accounts in that you earn interest on your money.
Instead, people who invest are entered into a monthly prize draw for a chance to win a tax-free award of between £25 and £1 million.
Are there any disadvantages to Premium Bonds?
Since 1957, National Savings and Investments (NS&I) has marketed Premium Bonds. They are a risk-free option to save because NS&I is supported by HM Treasury and is part of the government.
Premium Bonds do not pay interest, but they do have a monthly prize draw with prizes ranging from £25 to £1 million.
Each bond costs £1 and includes a unique reference number that is used to enter the draw. That implies that for every pound you invest, you may be eligible to win a prize once a month (though it is highly unlikely).
Limitations
Premium Bonds are only available to those who are 16 years old or older. They can, however, be purchased on behalf of children, grandchildren, and great grandchildren and kept by an adult until the child reaches the age of sixteen.
Popularity
In 2008, premium bonds were a big issue. People were looking for a safer way to save during the financial crunch, and Premium Bonds, which are backed by the government, cannot lose their value. People were also drawn to the product because of the increased chance of winning more money.
There are presently 74 billion Premium Bonds in circulation, with approximately three million winning a prize each month.
Potential returns
Prizes range from £25 to £1 million, with lower-value awards being granted more frequently than higher-value prizes.
It’s vital to keep in mind that there’s no assurance that you’ll win anything. The monthly prize pool determines the “average rate of return,” which is now 1.4 percent.
It’s not as simple as assuming that if you buy Premium Bonds, you’ll get a 1.4 percent return. There are several factors that go into determining your exact chances of receiving prize money in that amount, but we estimate that you’ll need to invest roughly £20,000 in bonds to get close to the average return.
This calculator can be used to determine your chances of winning and potential profits.
Advantages and Disadvantages
Is it worthwhile to invest in Premium Bonds? It is entirely up to you to make that decision. Before making any decisions, it’s a good idea to consider all of the possibilities:
You will not see any rewards on your investments if your Bonds are not picked in the monthly prize draw.
Everyone enjoys the prospect of winning a large sum of money! The thrill of the prospect of winning £25 to £1 million for each Bond held is enough to entice some investors.
While the mathematics required to determine your chances of winning are complex, it is currently believed that the possibility of winning any prize is 1 in 24,500 for each individual Bond held.
Premium Bonds are backed by the government, hence there are no risks involved. In the worst-case situation, the bonds purchased are never selected as a reward, and the account balance remains unchanged.
Though the numerical value of your savings cannot be reduced unless you remove money, the real-term value can. Because the cost of living is rising, a stable investment value that does not rise will lose purchasing power over time.
Savings are always tax-free, which is one of the key benefits of bonds: higher-rate and even basic-rate taxpayers can invest substantial sums with no tax consequences.
Since the Personal Savings Allowance was introduced in 2016, most savers have seen no tax liability on their returns. That means savers can invest in vehicles that provide higher returns, and the lack of tax is no longer a distinguishing or compelling feature.
Premium Bonds are backed by the government’s promise to buy them back at the same price you paid for them. That means you can take your money out whenever you want and not worry about being penalized.
After the bonds have been held for a full prize cycle, they are entered into their first reward draw. This implies that Bonds purchased in March will be retained until the prize draw in May. Borrowing from your Premium Bonds could result in you missing out on a successful month.
Premium Bonds are drawn on what day of the month?
Each month’s draw and winning bonds are announced on the first business day of the month. Sometimes, this will be the first day of the month, while other times, due to a weekend or bank holiday, you may have to wait a little longer.
How long do Premium Bonds go unclaimed?
Claims have no time limit, so you can go back as far as you like. Here’s how to get your hands on any prizes that haven’t been claimed yet: To begin your claim, call 08085 007 007 if you are a registered user of NS&I’s online and phone services.
How can you tell whether you’ve won a Premium Bond?
What to do if you’re not sure if you’ve won. On our website and in our prize checker app, you can use your holder’s number to check the status of your prize. Your holder’s number can be found on your Bond record or by logging onto your account.
What method is used to notify large premium Bond winners?
The NS&I’s Electronic Random Number Indicator Equipment, dubbed ERNIE, selects all Premium Bonds UK winners at random. This is who walked away with the most money in the October 2021 Premium Bonds.