Tool
Premium Bonds vs a savings account
A typical year's prizes against a savings account's interest after tax, and the savings rate that matches it.
Premium Bonds hold £25 to £50,000.
Salary, pension, rent - it sets the tax on interest.
Premium Bonds, a typical year
£725
3.63%, tax-free - what the middle holder of £20,000 wins in a year. The 4.35% prize fund rate would be £870.
Savings account, after tax
£800
£800 of interest, with no tax on it.
Break-even savings rate
3.63%
A savings rate above this beats a typical Premium Bonds year after tax. 4.35% matches the prize fund rate.
You can hold up to £50,000 in Premium Bonds and every prize is tax-free. The 4.35% rate and odds are NS&I's from the October 2026 draw, and both can change.
Tax is for 2026/27, as if this is your only savings interest - other interest uses the same allowances. From 6 April 2027 the tax on savings interest rises two points in every band.
How this is worked out
Each £1 bond has a 1 in 21,000 chance of a prize each month, and each prize is picked in proportion to the October 2026 draw's prizes. The typical year is the middle one, worked out exactly: half of holders of the same amount win less. Tax on the interest uses any spare Personal Allowance, the starting rate for savings and the Personal Savings Allowance, as the Tax on savings interest calculator does.
An illustration from the figures above, not a forecast. Facts, not financial advice.
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