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 couple of savings accounts out there that offer the chance to win a prize as well as any potential interest paid on your savings.
Here are some Premium Bond alternatives for you to consider.
NatWest Round Ups
First up we have NatWest Round Ups, which is a smart service designed to get you into the savings habit.
The idea is that whenever you pay with your debit card, the figure is rounded up to the nearest £1, with the difference then being stashed into a savings account.
So let’s say I spent £4.50 on my lunch.
The Round Ups service would mean that I paid £4.50 to the retailer, but my spent was rounded up to £5, with that extra 50p going into a savings account.
It’s a clever way to get you to start saving some cash on a regular basis, but without necessarily noticing or having to set up a standing order to keep putting money into that savings deal.
What’s more, it’s currently offering users the chance to bag a big cash prize. If you switch on Round Ups on your NatWest current account before 5.30pm on 30 November, you’ll be entered into a prize draw.
One user will bag the £5,000 top prize, while a further 30 runners-up will land a £350 prize instead.
The Halifax Prize Draw
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.
Willing to take on some risk? You could earn far better returns by investing your money (capital at risk).
Nationwide Start to Save
The Start to Save is a regular saver account from Nationwide Building Society, and as the name suggests it’s designed to get you to start building up a savings pot.
So long as you increase your balance by between £25 and £50 in each of the six months leading up to a prize draw, then you’ll be entered, with a top prize of £250. You also earn 3.5% on the money saved.
Prize draws will take place on 21 February 2023, 22 August 2023 and 20 February 2024, while the number of winners will vary, based on the size of the prize fund.
The prize fund is equal to 2.5% of the total increase in the balances of all accounts that qualify for the draw across the six calendar months leading up to the month of that prize draw, with Nationwide stating that your odds of winning will vary between one in 34 and one in 67.
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 £30,000 given away each month.
There’s a top prize of £10,000 which goes to one winner, with 50 prizes of £100, 500 prizes of £25 and 250 prizes of £10 also handed out.
Chip says that with each entry you have a one in 6,056 chance of winning.
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.
Similarly, if you're new to saving and can only set a small amount aside each month, the ability to earn a decent rate with the Nationwide Start to Save, as well as possibly land a prize, certainly seems like a safer option than Premium Bonds, where you could end up earning/winning nothing for years.
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.
So, ultimately, the best prize-based savings account depends very much on each person's financial situation.