Is premium bonds better than savings accounts?

It depends entirely on how lucky you are! Whereas with a savings account, you will definitely receive the advertised interest rate, if you have a premium bond, there is no guarantee you will win anything.

If you consider putting money into premium bonds, you must consider the fact that in the average month, the average bond will not win anything, so that your money will lose purchasing power after inflation is calculated.

However, despite the current easy level of access savings, many people may like to accept the risk that they might not win anything and prefer to put their money into premium bonds, especially because their initial investment is protected, and they can set out their bonds at any time.

Sarah Coles, a personal financial analyst at Hargreaves Lansdown, said: “The writing has been on the wall for premium bond prizes since the Bank of England cut interest rates in May.

“The question for many savers is whether this will be the last time the rate falls. On the one hand, ns & i’s fundraising target has risen slightly to £ 12 billion. On the other, at a time when the bank of England is expected to make decent chance that saverings rates will continue to gradually edge lower.

“This is very unlikely to place many premium bond holders. Millions of people are ready to survive through thick and thin, for the opportunity to win prizes and small opportunities that disappear to win the amount of cash that changes life.”

It’s up to you to decide whether you want to put money into a premium bond or whether you prefer the return that is guaranteed from your savings. Remember that you don’t need to choose one or another; You may, for example, choose to put a little into both so you have the opportunity to win prizes, but you will still get an interest in some of your savings.

Ms Coles said: “Always deserve to accept stock when the tariff falls, and considers whether you are still happy with the agreement, or whether you prefer the certainty of strong tariffs in the wider savings market. Check what is available from online banks and savings platforms, where you will usually find the strongest offer.”