Halifax prize draw and premium bonds - are they worth it?

7 November 2012

Moneywise questions the worth of saving into premium bonds compared to savings accounts and asks whether Halifax's prize draw scheme has any value. 

Premium bonds

With National Savings & Investments (NS&I) premium bonds, savers forego interest in the hope of scooping a monthly cash prize of up to £1 million.

Those with the maximum bond holding of £30,000 can expect to win relatively frequently, presuming average luck. But most are only small prizes.

On average, premium bond savers receive less in prize money than they would get in interest if their money were held in a best-buy account. For example, based on a rate of 3.25% you would earn £975 in interest for a £30,000 deposit over a year.

Halifax prize draw

Halifax offers a savings deal with similarities to premium bonds.

New and existing savers at Halifax (except for those living in Northern Ireland) who have more than £5,000 on deposit can opt into a monthly prize draw to win amounts up to and including £100,000, with a special £250,000 draw in December.

The best-paying eligible account is Halifax's 2.5% five-year fixed-rate ISA. If savers are happy with the rate being offered by Halifax on their savings then the chance of winning in the draw will be an added incentive to keep £5,000 in the account.

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