Premium bonds are a savings product sold by National Savings and Investments (NS&I) on behalf of the UK government. Each premium bond costs £1 and you can buy up to 50,000.
The money that you use to buy premium bonds technically earns interest but the amount of interest your own premium bonds get is literally based on luck. Rather than it being divided equally, a prize draw decides how the interest is shared each month.
Each premium bond has an equal chance of winning. The top premium bond prize is £1 million and there are a variety of smaller prizes down to £25 – so the more premium bonds you own, the greater your chances of winning.
You could therefore win more interest than you would get in a savings account, but you could win nothing at all.