A prize draw could be an option if you're searching for an alternative to Premium Bonds; one of these could offer up to £100,000 in prizes
One of the most popular savings products in the country is the Premium Bond, where investors aspire to win a monthly cash prize or even a million-pound jackpot.
However, the prize rate will continue to decline starting in April, and the comparable rates and winning odds in the Premium Bonds draw have decreased recently. Due to regulations and interest rate reductions, the Treasury-backed lender is unable to engage in excessive competition with the broader savings market.
The good news is that Premium Bonds may have more profitable competitors. With one prize draw offering the chance to win up to £100,000, several savings providers have introduced prize draw products. Are they superior to Premium Bonds, and how do they operate?
How prize draws operate.
How prize draws operate.
The way savings prize draws work is similar to how Premium Bonds work. The money you deposit into these easy-access or notice savings accounts entitles you to a prize drawing. The eligibility requirements, frequency, and payout rates for each provider's prize draws vary slightly.
Some, like the Halifax Prize Draw, offer you the added benefit of the prize draw payout in addition to interest on your savings. If you don't win with others, you don't get any money back, just like with Premium Bonds. Keep in mind that most holders of Premium Bonds never make money. These prize draws could be a good choice for you, of course, if you enjoy the rush of competition and aren't counting on a sure return on your savings.
These are the best substitutes for Premium Bonds available at the moment.
1. Get up to £100,000 in the Halifax Savers Prize Draw
Up to 100,000 is up for grabs in the Halifax Savers Prize Draw. A monthly draw is held for qualifying savers, and 1,603 of them win cash. The top three winners each receive £100,000, with 1,000 and 1,500 prizes of £100 coming next.
Method of operation: To enter the draw, you must register, which you can do via the Halifax app or mobile banking service. Your Halifax savings account will receive your winnings straight away if you win.
One benefit of the Halifax Savers Prize Draw is that any winnings are a bonus on top of the interest you are currently receiving from your savings account. Your savings will continue to earn interest even if you are unlucky and never win anything.
Eligibility: You must maintain £5,000 or more in eligible accounts for the entire calendar month in order to be eligible. This includes the majority of Bank of Scotland-branded savings accounts as well as all Halifax savings accounts and ISAs. Kid-related accounts are not included. Rather than being all in one savings account, the £5,000 could be split up among several accounts.
2. Up to 75,000 can be won through the Chip Prize Savings Account
The second most alluring jackpot, worth up to 75,000, is being offered by Chip. The top prize of £75,000 will be awarded to one saver each month, along with a £10,000 prize and over 6,500 prizes totaling £10,000.
The way it operates is that deposits made into the Chips Prize Savings Account go toward entries in a monthly prize draw rather than earning interest. Your account is credited with any winnings you receive.
It is based on the average balance for the calendar month that determines how many entries savers receive. The daily balance is divided by the total number of days in the month to determine the average balance. "They can reward savers who deposit earlier in the month and build long-term wealth with us" is how Chip describes this strategy.
Qualifications: Every saver who has a Prize Savings Account is automatically eligible for a number of prize draw entries.
3. Win up to £50,000 with the Family Building Society
The prize fund is run by the Family Building Society, which offers a monthly prize draw for its Windfall Bond product. There are prizes of 100, 500, 1,000, and 10,000, and both new and returning customers can win a jackpot of £50,000.
How it works: In the second calendar month following bond opening, newly opened Windfall Bonds are eligible to enter the Monthly Free Prize Draw. For instance, the April Monthly Free Prize Draw would include a Windfall Bond that was opened in February.
The total value of Windfall Bonds awarded in the previous month's free prize draw is multiplied by 1 percent/12 (one twelfth of one percent) to determine the monthly prize value.
Five prize levels receive a portion of the Prize Fund.
The February draw, for instance, offered 209 prizes totaling 145,900.
A variable rate of interest linked to the Bank of England base rate less 1 percent is paid by the Windfall Bond even if you don't win anything. After thirty-five days' notice, customers can access their money.
Eligibility: A Windfall Bond can be opened online, by mail, or in person at the Epsom branch of the Family Building Society. A deposit of £10,000 is needed for each Windfall Bond.
4. 5,000 can be won through Credit Union PrizeSaver
The prize pot: The Association of British Credit Unions oversees the PrizeSaver draw. With a top prize of £5,000, ten prizes of £50, and ten prizes of £20, it is a monthly prize draw.
How it operates: A monthly draw is automatically entered by savers. You can enter up to 200 entries into the monthly prize draw for each one held in a PrizeSaver account.
Eligibility: Participants must have PrizeSaver accounts with their local credit union in order to be eligible for the draw. One PrizeSaver account is all you can have. It should be noted that not all UK credit unions provide PrizeSaver accounts. Visit the PrizeSaver website to find out who is taking part.
Examine the National Savings and Investments Premium Bond in More Detail.
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