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.
In fact, there’s a brand new alternative to Premium Bonds offering savers the chance to pocket £250 in a monthly draw.
Here are some Premium Bond alternatives for you to consider.
BestInvest - win £250
The newest rival to Premium Bonds comes from BestInvest, which has 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 for 12 months, and saves 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.
Nationwide Start to Save - Win up to £250
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 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 - 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 3,750 prizes of £10 also handed out.
There’s also a £5,000 Mr & Mrs Smith gift card doled out each month.
Chip says that with each entry you have a one in 1,616 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 71% average win rate, according to Chip.
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.
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.
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%.
Check out our run-through of what that increase means for your chances of winning from Premium Bonds.
Ultimately, the best prize-based savings account depends very much on each person's financial situation.