Money Saving Expert Premium Bonds Calculator

Premium Bonds are a government-backed savings product offered by Money Saving Expert. They offer a chance to win prizes while earning interest on your savings. This calculator helps you estimate your potential returns based on different investment amounts and time periods.

How Premium Bonds Work

Premium Bonds are savings certificates issued by the UK government. Each bond costs £1 and earns interest through a fixed rate paid twice a year. Additionally, there's a chance to win prizes through a weekly draw.

Key Features

£1 minimum investment per bond
Interest paid twice yearly (June and December)
Weekly prize draw with potential wins up to £1 million
No interest on prize money

Interest Rates

The current interest rate for Premium Bonds is 4.5% per annum, paid twice yearly. This means you earn 2.25% every six months.

Prize Draw Odds

The odds of winning a prize depend on how many bonds are in circulation. The more bonds in circulation, the lower your individual odds. The prize structure includes:

£25 prizes for 1 bond
£50 prizes for 2 bonds
£100 prizes for 3 bonds
£500 prizes for 10 bonds
£1,000 prizes for 20 bonds
£10,000 prizes for 200 bonds
£100,000 prizes for 2,000 bonds
£1,000,000 prize for 20,000 bonds

Note: The odds of winning are calculated based on the total number of bonds in circulation. The more bonds in circulation, the lower your individual odds.

Using the Calculator

Our calculator estimates your potential returns from Premium Bonds based on your investment amount and time period. Here's how to use it:

Enter the number of bonds you plan to purchase
Select the time period for your investment (1-10 years)
Click "Calculate" to see your estimated returns

The calculator shows:

Total investment amount
Estimated interest earnings
Estimated prize wins (based on average odds)
Total estimated returns

Calculation Formula

Interest is calculated as: Interest = Number of Bonds × 2.25% × (Time Period / 0.5)

Prize wins are estimated based on average odds and the total number of bonds in circulation.

Example Calculation

Let's say you invest in 1,000 Premium Bonds for 5 years:

Number of Bonds	1,000
Time Period	5 years
Total Investment	£1,000
Estimated Interest	£225
Estimated Prize Wins	£1,250 (based on average odds)
Total Estimated Returns	£1,475

This example shows that with 1,000 bonds over 5 years, you could potentially earn £225 in interest and win an average of £1,250 in prizes, for a total return of £1,475.

Frequently Asked Questions

How often are the prize draws held?: Premium Bonds are drawn weekly on a Saturday. The draw takes place at 12:00 noon (UK time).
Can I cash in my Premium Bonds for a lump sum?: Yes, you can redeem your Premium Bonds for a lump sum at any time. The lump sum will include any interest earned but not any prize money.
What happens if I win a prize?: If you win a prize, you'll receive the prize money in addition to your regular interest payments. Prize money is not subject to interest.
Are there any fees associated with Premium Bonds?: No, there are no fees associated with Premium Bonds. They are a completely free government-backed savings product.
Can I transfer my Premium Bonds to someone else?: Yes, you can transfer your Premium Bonds to another person by completing a transfer form available from Money Saving Expert or your bank.