Are Premium Bonds better than top savings accounts right now?

Usually not. Most savers should expect about 3.2–3.3% from Premium Bonds on typical luck, while best UK savings rates are near 4.4–4.5% with certainty. If you value tax‑free prizes and government backing, bonds can still play a role, but guaranteed interest often pays more.

What is the NS&I prize fund rate and why doesn’t it match my return?

The NS&I prize fund rate is an average payout across all bonds. It is not a rate you earn. Your return depends on draws and holding size. Many small holders can get less than the pool figure. Larger holdings may sit closer to average, but results still vary month to month.

When do Premium Bonds make sense for higher‑rate taxpayers?

They can help after you have used your cash ISA allowance and your Personal Savings Allowance. Prizes are tax‑free, which can beat taxed interest. If best accounts pay far more, consider a mix: keep some Premium Bonds for prize potential and move the rest to a guaranteed rate.

Should I keep my emergency fund in Premium Bonds?

Usually no. An easy‑access account with a strong rate is better for emergency cash because interest is guaranteed and you can compare it directly to best buys. Premium Bonds are liquid, but returns vary and you might win little or nothing when you need the money.

Global Market Insights

December 27: Martin Lewis Flags 3.3% Premium Bonds vs 4.5% Savings

ByHuzaifa Zahoor December 28, 2025December 28, 2025

Premium Bonds are back in focus after Martin Lewis warned that most savers will likely earn around 3.2–3.3% on typical luck, while the best UK savings rates pay about 4.4–4.5%. With year‑end cash decisions due, we break down how Premium Bonds compare, what the NS&I prize fund rate really means, and where tax status matters. We also outline a simple order of actions for your cash ISA allowance and other accounts before the new year.