Premium Bonds are a savings product which have been popular with millions of people up and down the country since National Savings and Investment (NS&I) launched it back in the 1950s. At the beginning of each month, NS&I announces the names of the lucky Premium Bonds winners for that period. Next month, the winners of the latest Premium Bonds £1million jackpot prize will be announced on February 1, 2022 which is on a Tuesday.
Due to NS&I being a Government-supported institution, any deposits made with Premium Bonds are 100 percent protected from any potential harm or fraud which explains its long-term success with savers.
Bond holders are able to withdraw and deposit money whenever they want as part of this specific savings account, however interest is determined by a monthly prize draw.
Among the largest amounts someone can win through Premium Bonds is £1million, £100,000, £50,000 or £25,000.
As it stands today, the rate for the Premium Bonds is one percent but this is variable, meaning it could be changed by NS&I.
For the month of December 2021, there were two lucky winners of the financial body’s £1million prize: one being a man from West Sussex who had invested £46,000 into the savings prize draw. His winning bond was valued at £30,000 and was purchased only a few years ago in July 2017.
The other winner was a man from Lancashire, who invested £14,725 into Premium Bonds, significantly less than his fellow jackpot prize winner. His bond was valued at £5,000 and was only purchased within the last year in February 2021.
Many people look to follow in the footsteps of both of these gentlemen and look for ways to improve their chances of getting that £1million into their bank account.
On the NS&I’s website, savers and bond holders are able to get guidance on how to boost their chances of taking home the grand prize thanks to advice provided by the frequently asked questions page.
In response to this question, the NS&I replied: “Each £1 Bond number has an equal chance of winning, regardless of when or where it was bought.
“Over 95 percent of eligible Premium Bonds have been bought since the year 2000.
“So even though Premium Bonds have been on sale for over 60 years, this is why newer Bonds seem to win more frequently.
“When ERNIE randomly generates winners, it doesn’t store any numbers, so there’s no way any Bonds can be left out.
“In 2004, the £1million jackpot was won by a customer with only a £17 holding, who bought them in 1959.”
Despite the potential winnings that come from taking out Premium Bonds, many experts believe the savings option is no longer as enticing as it once was.
Jason Hollands, managing director of online investment service Bestinvest, explained: ‘In years gone by Premium Bonds were a popular option for friends and family to bestow on youngsters.
“But along with other savings accounts, the returns on these have dwindled to negligible – and after inflation negative – amounts.”
Agreeing with this train of thought, Laura Suter, the head of personal finance at AJ Bell, noted the dwindling popularity in the NS&I product.
Ms Suter explained: “Premium Bonds, once a more common gift (particularly from grandparents), have waned in popularity, as the interest paid on them has dwindled too.
“People are now as likely to gift Premium Bonds this Christmas as they are to buy someone Bitcoin – with just two percent of those gifting money planning to do either.
“Clearly the process for buying Premium Bonds is slightly slicker than transferring crypto, but both are unlikely to make an appearance in most houses.”