Jasmine Birtles
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How to Buy Premium Bonds for the First Time (Updated for 2025)
Ruby Layram
27th Mar 2025
Fancy the idea of saving money with a chance to win tax-free cash prizes every month? That’s exactly what Premium Bonds offer! Instead of earning interest like a regular savings account, your money goes into a prize draw where you could win anywhere from £25 to a jaw-dropping £1 million- completely tax-free.
Run by NS&I (National Savings & Investments) and backed by the UK government, Premium Bonds are one of the safest ways to grow your savings while keeping your cash accessible.
Whether you’re looking for a secure place to stash your money or just love the thrill of a prize draw, investing in Premium Bonds could be a smart move.
Let’s break down how to buy them and what you need to know before getting started.
What Are Premium Bonds, Anyway?
Before you whip out your bank card, let’s cover the basics. Premium Bonds are a savings product offered by National Savings & Investments (NS&I).
Instead of earning interest, your bonds go into a monthly prize draw where you could win between £25 and £1 million- all tax-free. The more bonds you hold, the higher your chances of winning.
However, here’s no guarantee of returns, so it’s more of a lottery-style savings rather than a traditional investment.
If you’re lucky, you could end up with some pretty generous returns on the money that you save!
Here’s how to get started:
Step 1: Check If Premium Bonds Are Right for You
Before diving in, ask yourself:
- Do I like the idea of potentially winning tax-free cash?
- Am I okay with not earning interest on my savings?
- Do I need access to my money at short notice? (Good news: you can withdraw anytime.)
If you answered yes, then Premium Bonds might be a great option for you. If you prefer guaranteed returns, though, you might want to look into fixed-rate savings accounts or ISAs instead.
Step 2: Decide How Much to Invest
You can buy Premium Bonds with as little as £25, and the maximum holding limit is £50,000. Unlike the lottery, you don’t lose your money- you can cash out anytime.
Most people start small and build up their holdings over time. But remember: more bonds = more chances to win!
Step 3: Set Up an NS&I Account
To buy Premium Bonds, you’ll need to go through NS&I, the government-backed institution that runs them. Here’s how to get started:
Online (Easiest Method)
- Head to www.nsandi.com.
- Click on Premium Bonds and hit Buy Now.
- Register for an NS&I account (if you don’t have one already).
- Choose how much you want to invest.
- Pay via debit card or set up a bank transfer.
- Done! You’ll get a confirmation email, and your bonds will be active in the next prize draw.
By Phone
Prefer to talk to a real person? Call NS&I on 08085 007 007 and follow the steps over the phone.
By Post
If you like doing things the old-fashioned way, you can download a Premium Bonds application form from the NS&I website and send it in by post. Just remember, this method takes longer!
Step 4: Keep an Eye on Your Prize Draws
Your bonds are entered into a monthly prize draw, and winners are announced on the 1st of each month. Here’s how to check if you’ve won:
- Use the NS&I prize checker app (download it on your phone).
- Log in to your NS&I online account.
- Call NS&I’s prize checker line.
If you win, the money is either reinvested into more bonds or paid straight into your bank account- it’s your choice!
Step 5: What If You Want to Cash Out?
Need your money back? No problem. You can withdraw your Premium Bonds at any time, and NS&I will send the funds to your bank account within a few working days.
Just log in to your NS&I account, request a withdrawal, and you’re good to go.
Are Premium Bonds Worth It?
It depends on your financial goals. If you love the idea of potentially winning tax-free cash while keeping your money safe, then Premium Bonds are a great option. However, if you prefer guaranteed interest, you might be better off with a high-yield savings account or a cash ISA.
Either way, now you know exactly how to buy Premium Bonds for the first time—without the confusion. So, are you feeling lucky?
Do you want to learn more about investing? To keep on top of the latest developments in the wider investing sphere sign up to the fortnightly MoneyMagpie Investing Newsletter. It’s free and you can unsubscribe at any time.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. Companies listed above are not necessarily endorsed by Money Magpie. When investing your capital is at risk.
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