Premium Bonds prize rate rises to 4.35% from the September draw

NS&I lifts the Premium Bonds prize fund rate from 3.80% to 4.35% with more large prizes. Odds stay at 21,000 to 1

TaxHub editorial teamLast reviewed 2 September 2026 · 2 min read · Checked against the original announcement

NS&I has raised the Premium Bonds prize fund rate to 4.35% from the September 2026 draw, up from 3.80%. The odds of any single £1 bond winning stay at 21,000 to 1, but the prize fund is larger, so there are more prizes above £25 in each monthly draw. Prizes remain tax-free and the maximum holding is £50,000.

Key facts: prize fund rate 4.35% from September 2026, up from 3.80%. Odds 21,000 to 1 per £1 bond. Maximum holding £50,000. All prizes tax-free. More prizes of £50 and above in each draw.

What the rate actually means

The 4.35% is not interest you receive. It is the total prize pot each month expressed as a share of all bonds held. Some people win far more than 4.35%, most win less, and a holder with a small balance can go a year without winning anything.

Someone with the £50,000 maximum and average luck would expect prizes worth roughly 4.35% a year. Someone with £500 has around 24 chances a month at 21,000 to 1, so most months will bring nothing.

The rise comes as the Bank of England base rate sits at 3.75% and easy-access savings accounts pay around 4.5% to 5% at the top end. NS&I moves its rate to stay competitive without pulling in more money than the Treasury wants.

Who comes out ahead

Premium Bonds make the most sense for higher and additional-rate taxpayers who have used up their Personal Savings Allowance. A higher-rate taxpayer with £500 of allowance already used would need a taxable account paying well over 7% to match a 4.35% tax-free return. That does not exist.

Basic-rate taxpayers with modest savings usually do better in a top easy-access account, where £1,000 of interest is tax-free and the return is guaranteed. Check a comparison site for today's rates.

Anyone holding Premium Bonds for the fun of the draw rather than the return is not doing anything wrong, but should keep an emergency fund elsewhere where the return is certain.

What it means for you

If you already hold Premium Bonds, you do not need to do anything. Bonds bought before the September draw are included at the new rate.

If you are considering buying, new bonds must be held for a full calendar month before they enter a draw. Bonds bought in September go into the November draw.

Check for unclaimed prizes at nsandi.com if you have held bonds for years and moved house. Prizes never expire.

How we checked this Figures in this guide were taken from the original announcement and were correct on 2 September 2026. Spotted a change or an error? Tell us and we will review it.

About this guide. TaxHub explains how things work; it does not give personal financial advice and is not regulated by the FCA. Figures were correct when written but change often. Check gov.uk or the provider before you act, and get regulated advice for decisions about pensions, mortgages or investments.