Are NS&I Premium Bonds better than a 4.5% easy-access account?

For most basic-rate taxpayers, no. A 4.5% account pays about 3.6% net after tax, which is above the typical 3.2–3.3% Premium Bonds outcome. If you are higher or additional rate and above allowances, tax can tip the balance toward Premium Bonds.

Who should consider NS&I Premium Bonds right now?

Savers who have filled their ISA and Personal Savings Allowance, especially higher or additional-rate taxpayers, may prefer Premium Bonds for surplus cash. They keep capital safe, prizes are tax free, and returns can be competitive after tax. Use guaranteed accounts for core needs first.

How safe are Premium Bonds compared with bank accounts?

NS&I Premium Bonds are fully backed by HM Treasury, so your capital is 100% secure. Bank and building society deposits are protected by FSCS up to £85,000 per person, per institution. For large balances, spread money across providers or consider NS&I for unmatched government backing.

What is the main drawback of Premium Bonds?

Returns are unpredictable. Many months you may win nothing, and the typical long-run outcome is around 3.2–3.3%, which trails today’s best savings rates. If you need steady income or certainty for bills, a guaranteed easy-access or short fixed-rate account is usually a better choice.

Global Market Insights

December 29: NS&I Premium Bonds vs 4.5% Savings — Martin Lewis

ByHuzaifa Zahoor December 29, 2025December 29, 2025

NS&I Premium Bonds are back in focus as Martin Lewis says typical returns are about 3.2–3.3%, while the best easy‑access and short fixes pay around 4.4–4.5%. That gap matters for year‑end planning. We explain how NS&I Premium Bonds compare on return, tax, and safety, and when they still make sense. With ISA allowances and the Personal Savings Allowance in play, a clear plan can boost what you keep. Use this guide to make a smart, numbers‑based choice today.