Best Premium Bond alternatives 2025: savings that include entry into a prize draw

With the Premium Bond prize rate having been cut two months in a row, we explore alternatives for those looking for a ‘lottery-style’ account.
The Premium Bond prize rate has been in freefall of late.
The rate stood at 4.4% as recently as November, but was cut to 4.15% in December and then again to just 4% in this month's draw.
When you consider the best access Cash ISAs – which are also tax-free – currently pay as much as 5%, it means savers now have to accept a significantly lower rate in the hopes of winning a big prize in the Premium Bond draw.
If the lottery-style element is your main reason for holding the bonds, then you could consider looking at some of the other alternatives out there.
Some will offer both guaranteed interest each month and the chance of winning a prize, although they are taxable accounts so it's worth factoring this in before moving your savings to one of them.
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The Halifax Prize Draw - win up to £100,000
Launched back in 2011, Halifax’s Prize Draw is one of the best-known of these ‘lottery-style’ accounts.
It offers three tiers of prizes: three winners get the top prize of £100,000 per month, 100 winners bag a £1,000 prize, and 1,500 winners get a £100 prize.
To enter, 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 also qualify.
In terms of rates, the bank has a raft of accounts paying anywhere between 1.15% and 3.7% to choose from.
Be aware, you won’t be automatically entered into the draw and will need to register through Halifax’s online banking, mobile app or in branch.
Savings in joint accounts are split equally and joint account holders will need to register separately.
Halifax will then get in touch if you win.
Chip - win up to £75,000
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.
There’s a top prize of £75,000, followed by a prize of £10,000 and 250 additional prizes to win each month.
To qualify, you’ll need to hold at least £100 in the account and Chip will contact you directly if you win a prize.
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 entries.
There is then a top prize of £5,000 in the draw, with 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, although you'll have to beat some pretty extraordinary odds to bag the top prize.
In fact, you’ll have a better chance 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 such as the PrizeSaver draws may appeal.
But if you have a significant sum of money to stash away, Premium Bonds do become the more attractive option as your overall likelihood of winning increases with the size of your pot.
Ultimately, the best prize-based savings account depends very much on your financial situation.
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