Savings accounts with a prize draw (updated October 2023)

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This post was originally published in August 2021. It was last updated in October 2023 to reflect the products currently on the market.

While every effort has been made to ensure accuracy, new products are being launched and modified all the time so it’s always best to read the small print before you sign up.

There are lots of savings accounts that have prize draws attached to them to give savers an extra incentive to, well, save.

There’s no spending involved, or effort really – all you have to do is put some money into the bank and you could win as much as £1million in cash.

For once, it’s not too good to be true. Freakonomics Radio actually did a really interesting podcast on how it all works. It’s in a US context, but was inspired by NS&I’s Premium Bonds.

Interest rates are now significantly higher than when this post first went out, but an account with a bonus prize draw might still sweeten the deal for savers.

They also have the benefit of being fairly accessible – unlike investment products, which are prone to fluctuation – which is ideal for an emergency fund.

One thing to note: the chances of winning are often pretty small so make sure you shop around for the best interest rates as well.

Chip

• Odds: 1 in 1,059 for every £10 entry (August 2023)
• Minimum saving: £100
• Maximum prize: £10,000

Chip’s instant access Prize Savings Account* is relatively new to the market, and it’s changed a bit since its launch. It sort of works like NS&I’s Premium Bonds.

Basically you have to deposit a minimum of £100 into the account and maintain this balance. For every £10 saved, you get one entry into the prize draw. So the more money you save, the more entries you get, but no interest is paid on the balance.

Any money you deposit is protected by the Financial Services Compensation Scheme (FSCS).

Each month there’s one big prize of £10,000 and, Chip says, thousands of smaller prizes ranging from £10 to £100.

If you do win, the money is shown as “prize” on your account – it doesn’t become money until you cash it out. That means it doesn’t count as additional entries into the prize draw, nor is it protected by FSCS.

In other words, if you’re lucky enough to win, cash out that money as soon as possible.

If you do want to earn interest, Chip’s other savings accounts currently offer some of the highest interest rates around.

The Chip Instant Access Account* offers 4.84% interest, although from experience it’s not quite as instant access as you might think.

There’s a slight delay of a day or two when you deposit and withdraw the money, which is longer if it’s just before or over the weekend.

It does add interest to your account daily though, so you can quickly see your interest rate build up through compounding.

NS&I Premium Bonds

• Odds: 1 in 21,000 for every £1 entry (September 2023)
• Minimum saving: £25
• Maximum prize: £1 million

When it comes to savings products with prizes, NS&I’s Premium Bonds are the original and by far the nation’s favourite.

The idea is that for every £1 you hold of the bonds, you get an entry into a monthly prize draw in lieu of interest payments. That interest is instead pooled together into a prize fund, which is then used to pay the winners.

There are over five million monthly prizes ranging from £25 to £1 million, and the prizes are awarded tax free. It’s also tax free to hold your money in Premium Bonds which potentially makes it a quite tax-efficient way to save for those in higher tax brackets with lots of disposable income.

The minimum investment in Premium Bonds is £25 and you can hold up to £50,000 worth of bonds.

If you’re happy with not receiving any interest payment – because, with average luck, the chances of winning are so low that you shouldn’t expect to win at all – Premium Bonds is an extremely safe way to save your money.

However, cashing out the bonds can take a few days so it’s not ideal if you think you might need the money instantly at some point in the future.

The Family Building Society Windfall Bond

• Odds: 1 in 714 for every £10,000 investment (always the same)
• Minimum saving: £10,000
• Maximum prize: £50,000

The Family Building Society offers a very similar product to the Premium Bonds.

The Windfall Bond is much smaller in size: There are just 21 prizes each month, ranging from £1,000 to £50,000.

The odds of winning are much better though – The Family Building Society says there’s a 1 in 714 chance of winning a prize in any given draw and these odds are held because they enter blank entries into the draw when there aren’t enough real entries.

The odds are so good because there are only 15,000 entries in the prize draw. 

However, each bond is exactly £10,000, which prices a lot of people out. And if you want to buy several bonds, you’ll have to open multiple accounts, which is a bit of a hassle.

Also, you can’t withdraw the money – only close the account by giving a 35-day notice, so it’s not ideal for an emergency fund, unless for example you have a second household income that can tide you over in the short term.

Its other benefit is that it pays interest payments at the Bank of England’s Bank Rate on top. Unfortunately because of its popularity, it’s not currently accepting any new customers.

Halifax Savers Prize Draw

• Odds: variable
• Minimum saving: £5,000
• Maximum prize: £100,000

One of the longest running prize draws for savers offered by a high street bank comes from Halifax, and it’s open to those who save with Halifax and the Bank of Scotland (they’re in the same banking group).

There are 1,603 prizes each month with values of between £100 and £100,000. The odds are not released, and presumably varies from month to month depending on how many people qualify for the draw (the prize fund is set at £550,000).

This one is for those who already have a fair bit of money tucked away as you need at least £5,000 to qualify for the prize draw.

On the plus side, the £5,000 can be split across more than one savings product, including cash ISAs, so you can mix it up between instant access accounts and notice accounts.

Oops, you’ve missed these

Here are some prize draws that have already finished. It’s always worth keeping an eye out to see whether they’ll come back, though.

Nationwide Building Society

Nationwide’s popular Start to Save account was a good one for those who didn’t have a lot of money.

The draws are taking place on 21 February 2023, 22 August 2023 and 20 February 2024, but it’s no longer possibleto apply for an account.

You had to deposit between £25 and £50 into the account each month (for an earlier version it was between £50 and £100) to be entered into a qualifying draw.

The odds were between 1 in 34 and 1 in 67 (it varies depending on the size of the prize fund), and the prize was £250 (previously the prize was only £100).

For those with a lot of savings, the deposit caps on this account meant it’s probably not that useful. But the interest rate was 3% AER for 24 months, which was among the best for instant access accounts.

I’ve had an account from the very beginning but have sadly never won anything.

Natwest/RBS Digital Regular Saver draw

Natwest and the Royal Bank of Scotland (they are in the same baking group) launched a savers’ draw just for the month of August 2021 for their Digital Regular Saver account.

These accounts have been on the Money Talk Best Buy list for some time as they pay an interest rate of 6.17% AER (correct in October 2023), and you can deposit £150 a month up to a £5,000 limit.

Anything over £5,000 is paid a interest rate of 1.75% AER.

They’re perfect for an emergency fund as both are instant access and, once you’ve reached the £5,000 cap, you don’t have to deposit any more money but can still get the same great rate of interest.

You do need a current account with them to open a Digital Regular Saver though.

In terms of the prize draw, you had to open a Digital Regular Saver by 5.30pm on 31 August 2021 and pay in between £1 and £50 in September, October and November.

There were just 10 prizes of £1,000 to be won, with no odds given. And unfortunately existing customers were not eligible to win anything.