The only hope for savers wanting a decent return perhaps now rests solely with banks running prize draws.
More providers are now offering savers the chance of winning cash prizes. And the more you invest, the better the odds.
The nation’s favourite savings product — NS&I’s Premium Bonds — offers the chance to win £1 million in the monthly draw.
Lucky dip: More providers are now offering savers the chance of winning cash prizes. And the more you invest, the better the odds
But, with the Treasury-backed bank soon cutting rates, savers might want to take their chances elsewhere.
This week, Nationwide has launched a rival account giving savers the chance to win £10,000, on top of ordinary interest.
Anna Bowes, from savings website Savings Champion, says: ‘A competition or a prize draw is a good way to pique savers’ interest. The lure of a potential big win keeps people interested, which is why Premium Bonds are successful.’
Here Money Mail takes a look at the prize-draw savings accounts on offer and gives you the odds of winning…
NS&I’s famous Premium Bonds
Last week National Savings & Investments announced it would be slashing the number of prizes, which will reduce the odds of winning significantly.
Currently, it hands out more than three million prizes every month between £25 and £1 million.
It says the odds of any £1 Premium Bond winning a prize are 24,500 to one. But in December, the odds will fall to 34,500 to one.
Cuts: The nation’s favourite savings product – NS&I’s Premium Bonds – offers the chance to win £1 million in the monthly draw
The winning bonds are drawn at random by a computer known as Ernie (Electronic Random Number Indicator Equipment).
The current odds of winning are equivalent to a 1.4 per cent interest rate, which will fall to 1 per cent in December.
The minimum investment is £25. Maximum is £50,000. You can cash in your holding at any time.
Odds of winning with £10,000 savings: Currently one in three every month.
Nationwide’s mutual Reward
Nationwide’s new 18-month fixed-rate bond is the latest addition to the market.
Launched on Monday, the Mutual Reward Bond gives customers one entry to a one-off prize draw for every £100 saved.
Those who save the maximum £10,000 have at least a one-in-200 chance of winning a £10,000 cash prize. Those who deposit £500 have a one-in-4,000 chance of winning.
You will also earn 0.5 per cent interest and the equivalent of 0.5 per cent of all savings in the bonds will be paid into the prize fund, so the more customers who contribute and the larger the sum, the more £10,000 prizes there will be.
Only Nationwide members can open the account online, via its mobile banking app or in a branch.
The draw will take place on February 2, 2021 and is open to members in England, Scotland and Wales, but will not be available in Northern Ireland due to the way prize draws are regulated there.
To be eligible for it you must invest at least £100, and savers cannot make any withdrawals until the 18-month fixed term ends.
Odds of winning with £10,000 savings: At least one in 200.
Options: With the Treasury-backed NS&I soon cutting rates, savers might want to take their chances elsewhere
The Family’s Windfall Bond
The Family Building Society brought back its Windfall Bond earlier this month — giving savers a one-in-714 chance of winning 21 cash prizes every month.
Rewards range from £1,000 to £50,000. Each month, every qualifying bond is entered into a draw offering 15 prizes of £1,000, three lots of £2,500, two £10,000 sums and one jackpot of £50,000.
Savers need £10,000 to buy a bond, and they’ll also earn 0.1 per cent interest. They’ll be entered in the prize draw in the second month after opening the account.
The mutual, which ran its first Windfall prize draw in January 2015, says customers with just one bond have a one-in-60 chance of winning a prize at least once in the first 12 draws.
However, there is a chance that no prizes will be won. Some 15,000 bonds will be entered into the prize draw, but if not enough have been bought, the building society will fill the gap with blank tickets.
If you want your cash back, you will need to give 35 days’ notice and close your account. The prize draw takes place on the 10th working day of every month.
Odds of winning with £10,000 savings: One in 714 every month. One in 60 over 12 months.
Halifax’s Savers Draw
If you have £5,000 or more held in a Halifax or Bank of Scotland personal savings account, you can sign up to enter its Savers Prize Draw. It offers 1,603 prizes including three lots of £100,000, 100 prizes of £1,000 and 1,500 prizes of £100.
To qualify, you must register online or via mobile banking, or at a branch. If you hold £5,000 or more for a calendar month in any Halifax savings account, including cash Isas, you will be entered in the next month’s prize draw.
Most of Bank of Scotland-branded personal savings accounts are also included. Any savings in joint accounts will be split equally and account holders will need to register for the draw separately.
Halifax says there have been more than 105,000 winners and it has paid out over £57 million since it launched the draw in 2011.
Odds of winning with £10,000 savings: Undisclosed.