Premium Bonds
An NS&I product that pays no interest, entering your stake into a monthly prize draw.
Premium Bonds are issued by National Savings & Investments, a Treasury-backed agency, so every penny is 100% protected by HM Government (no FSCS limit needed). You can hold from £25 up to £50,000. Instead of interest, each £1 bond gets a number entered into a monthly draw, with tax-free prizes from £25 up to £1 million. The annual prize fund rate (currently around 4.40%) is the average payout across all bonds; many holders earn nothing in a given year, while a lucky few win big. Sensible as a safe parking spot for higher-rate taxpayers who have used their personal savings allowance, but not a serious wealth-builder.
A 60-second lesson that puts this term in context, alongside the others, lives inside the Finlo app.