5 prize-linked bank accounts WITHOUT risking cash when Premium Bonds change
MILLIONS of Premium Bond holders can expect a drop in payouts as the prize money is reduced.
From next month, all prizes will have fewer winners, except the lowest of £25 and the jackpot of £1 million.
The NS&I prize fund rate will be reduced from 4.65 percent to 4.4 percent.
But the odds of winning anything remain the same: 21,000 to one for every £1 bond.
Harriet Cooke looks at other price-linked accounts that might be a more attractive home for your money.
Premium Bonds – For those who dream big
HOW DOES IT WORK? Premium Bonds offer no interest, but instead let you enter a monthly draw, with prizes of up to £1 million.
You can pay between €25 and €50,000.
PRICES: It varies every month but there are usually over a million £25 prize winners.
Next month, more than four million are expected to win amounts of £50, £100, £500, £1,000, £5,000, £10,000, £25,000, £50,000, £100,000 and £1 million.
Two lucky people will continue to receive the top prize each month, but with the overall cut to the fund, 85 are likely to receive £100,000, compared to 91 in February.
INTEREST RATES: There is a ‘price percentage’ of 4.4 per cent, meaning for every £100 customers pay, they typically pay out £4.40 per year.
But no one is guaranteed to win anything.
CHANCES: In February’s draw, the odds of a £1 bond winning a prize were one in 21,000.
A £25 win was one in 118,244, and winning the £1 million jackpot was one in 61.37 billion.
In contrast, the odds for the EuroMillions are one in 13 for any prize, and one in 140 million for the jackpot.
Credit Union Pulls – For those on a tight budget
HOW DOES IT WORK? The PrizeSaver draw is managed by the Association of British Credit Unions.
Credit unions are not-for-profit organizations that offer loans and savings accounts to local people or selected industries.
You can participate if you are a member of a credit union linked to the scheme.
Find out more about the participating unions at pricessaver.co.uk.
You only need €1 to enter the draw and the balance is limited to €200.
Every pound saved equates to one entry into the draw.
PRICES: The jackpot is £5,000, with a further ten prizes of £50 and ten of £20.
INTEREST RATES: Varies per union. Commsave Credit Union for postal workers paid a dividend of 1.75 percent last year.
Others pay nothing extra on the PrizeSaver balance.
CHANCES: Varies depending on how many are entered each month and how much you have saved.
Last month, 1,924,818 tickets participated in the draw.
Kent Reliance – For high speed chasers
HOW DOES IT WORK? This specialist bank holds a monthly prize draw for customers with savings of £100 or more, or a mortgage account balance of £1,000 or more.
It is one entry per person.
If there is a joint account, the first named account holder will participate in the draw.
PRICES: £1,000 for each monthly draw.
INTEREST RATES: Kent Reliance’s Easy Access Account currently pays 5.07 per cent, although you need £1,000 to open it.
CHANCES: Kent Reliance hasn’t announced the odds, but if you like the thrill of a potentially decent win – and you’ve got £1,000 to spare – this isn’t a bad place to put your money.
Chip Price Savings – For people who are good with phones
HOW DOES IT WORK? Chip is a savings app that links to your bank account, views your expenses and income and calculates what you can save every few days.
The money is automatically moved to a savings account.
There are several Chip savings accounts, including one that offers access to a prize draw in lieu of interest.
There is £75,000 worth of prizes to be won every month.
For every €10 you deposit into the prize savings account, you will be entered into the prize draw once, and you must have an average balance of €100 throughout the month.
PRICES: A top prize of £10,000, plus 50 prizes of £100, 100 prizes of £50, 500 prizes of £25 and 4,250 prizes of £10.
INTEREST RATES: No.
CHANCES: Varies by month, but in a recent draw a £10 entry had a one in 1,059 chance of winning a prize.
Halifax – For those who have cash on hand
HOW DOES IT WORK? £550,000 worth of prizes are awarded each month to Halifax and Bank of Scotland customers who have at least £5,000 in savings and have registered for the draw. Children’s bills are not included.
PRICES: Three prizes worth £100,000, 100 prizes worth £1,000 and 1,500 worth £100.
INTEREST RATES: Halifax’s highest paying easy access account is the Reward Bonus Saver at 4.2 per cent, although this drops to 1.35 per cent if you make four or more withdrawals per year.
After a year, the account turns into an Instant Saver, which pays out 1.45 percent on balances up to £9,999.
The top prizes are life-changing, but you lose out on the higher rates available elsewhere.
CHANCES: Halifax does not want to say how many people will participate in the draw, something that irritates customers, who therefore cannot calculate and compare the chances of winning.
‘I’ve won £400 playing Premium Bonds in just over three years’
INSTEAD of playing the lottery, mother-of-two Kate Tynan prefers to buy Premium Bonds, which keeps her money safe.
The business coach, who mentors cake makers and runs thecakebusinessclub.co.uk, said: “I have been investing in them since September 2020 and so far I have been lucky.
“Last year I won £100 in January, £50 in September and £100 in June. In total I have won £400 in just over three years.”
Kate, 45, inset, from Manchester, currently has £9,000 saved in Premium Bonds, but her balance will change if she has to pay for a major purchase such as a holiday, or if she needs to top this up with a lump sum.
She adds: “It’s easy to move money in and out of the account.
“I occasionally play the lottery, but once the money is spent you can’t get it back. With Premium Bonds you run no risk of losing the money and it feels safer.”