Should you ditch premium bonds for a Cash ISA?

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We take a look at your chances of winning with premium bonds and whether there’s a better way to save.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Published on 20 December 2023

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

Premium bonds are the country’s biggest savings product, with an incredible 22 million people holding £121bn worth of them.

We’re drawn to them by the irresistible allure of the chance they could make us millionaires overnight – without having to pay a penny in tax.

However, although they’re a national treasure, they still have their flaws.

This article isn’t personal advice. If you’re not sure if something is right for you, seek advice. Tax rules change and benefits depend on individual circumstances.

The biggest attraction of premium bonds over any other kind of savings is the chance to win a major prize.

Every bond is entered into a prize draw every month – in May, there were five million prizes – including over 1,000 paying £10,000 or more – and two of £1 million.

Clearly if you win big, no other savings product could come anywhere near being as