Best Premium Bond alternatives 2024: savings accounts that include entry into prize draw

These Premium Bond alternatives let you earn interest while also being entered into a prize draw.

The main reason Premium Bonds are so hugely popular is that they give savers the chance of winning big cash prizes instead of earning interest. 

But did you know there are a handful of savings accounts out there that offer the chance to win a prize as well as any potential interest paid on your savings?

And, with NS&I recently announcing its intention to cut the Premium Bond prize rate from March, you may well be looking for a new home for your money anyway.

If so, here are some Premium Bond alternatives for you to consider.

BestInvest - win £250

The newest rival to Premium Bonds comes from BestInvest, which last year launched a monthly draw for regular savers.

Each month one saver will be selected at random to win £250.

In order to qualify, savers must have set up a direct debit or standing order of at least £50 to pay into their ISA, self-invested personal pension (SIPP) or investment account before the 12th of the month.

The prize draw will run until July 2024, and savers can only win once. 

The Halifax Prize Draw - Win up to £100,000

Halifax operates a prize draw each month.

There are three tiers of prizes: three winners get the top prize of £100,000, 100 winners bag a £1,000 prize, and 1,500 winners get a £100 prize.

To qualify, you need to have more than £5,000 in a qualifying Halifax savings account for a whole month.

This could be in a single account, or across multiple accounts in your name, while most Bank of Scotland branded savings accounts qualify too.

You will then need to register in order to be entered into the draw, which you can do through Halifax’s online banking, mobile banking or in branch.

Halifax will then get in touch if you win.

Chip - Win up to £100

Chip is a savings and investment app, which runs its own version of Premium Bonds.

It’s a similar gimmick, in that no interest is paid on the money set aside in its Prize Savings Account.

Every £10 you save is worth one entry into the monthly draw, with a total of £75,000 given away each month.

There’s a top prize of £10,000 which goes to one winner, with 50 prizes of £100, 100 prizes of £50, 500 prizes of £25 and 4,250 prizes of £10 also handed out.

Chip says that with each entry you have a one in 1,059 chance of winning, though obviously you stand a far better chance if you have a higher balance ‒ those with an average balance of £20,000 have a 84% average win rate, according to Chip.

NatWest Invest ‒ win up to £10,000

A slightly different scheme is being run by NatWest Invest, with a beefy £10,000 top prize on offer to those who set up a regular payment into a NatWest Invest account, such as a Junior ISA or a Stocks and Shares ISA.

You need to set up the regular payment before 4 March 2024, with the prize draw taking place on 29 March. One winner will bag the £10,000 jackpot, with 10 further winners receiving £1,000 prizes.

PrizeSaver - Win up to £5,000

Finally, there’s the PrizeSaver scheme which is run by a host of credit unions across the UK. 

Every £1 saved with participating credit unions is worth an entry into the monthly draw, up to a maximum of £200. 

There is then a top prize of £5,000 in the draw, with at least 20 runner-up prizes of upwards of £20.

Are any better than Premium Bonds?

If you're dreaming of winning a life-changing sum of money, then Premium Bonds are your best bet as they pay out two £1 million prizes a month (although the £100,000 prizes mentioned above aren't exactly small change either!), although you'll have to beat some pretty extraordinary odds to do so.  

That said, you will have a better chance of winning with some of the other draws mentioned in this piece.

If you're new to saving and can only set a small amount aside each month, then deals like the BestInvest draw or the PrizeSaver draws may be attractive, since you don’t need to have much set aside in order to qualify for entry.

But if you have a lot of money to put away then Premium Bonds do become the more attractive option as your overall likelihood of winning something grows with the size of your pot. 

That attraction has only increased of late after National Savings & Investments (NS&I), the Government-backed bank which provides Premium Bonds, has repeatedly hiked the ‘prize rate’ on the bonds.

The prize rate is an indication of the return that a typical saver will get from their bonds, and now stands at 4.65%, the highest level since 1999.

Ultimately, the best prize-based savings account depends very much on each person's financial situation.

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