Premium bonds can be held by anyone who is over 16-years-old and the prizes they award are completely tax-free. There is a minimum holding of £25 for each investment and a maximum of £50,000.
If a holder wins, they will be contacted by NS&I by email, text message or post.
Winners of a prize of £5,000 or more will not have the money paid to them automatically.
NS&I will check in with these winners first by sending them a claim form in the post.
This form will ask the holder how they’d like to be paid and the form will need to be posted back.
The prizes themselves can be handled in a number of ways and the holders of said winnings can choose how the money is paid to them.
Holders can ask NS&I to automatically reinvest any prizes into more bonds, which will give them a higher chance of winning prizes in future draws.
Premium bonds are not just used for the monthly prize draws, they can also be used as a general savings product.
They can be cashed in at any time and this request can be made online or over the phone.
If this is done, NS&I will normally cash in their oldest premium bonds first.
It is not possible to request that specific numbers are cashed in.
Some people may take the decision to cash in their bonds at the moment as coronavirus impacts family finances, meaning many will need to get hold of as much cash as possible.
On top of this, the unlikeliness of winning may also make premium bonds relatively unpopular at the moment.
The odds of winning are 24,500/1 and the annual prize fund interest rate is 1.4 percent.