Chip Prize Savings vs Premium Bonds: odds, prizes and safety

The quick verdict

For most people choosing between the two, Premium Bonds are the safer home for a large sum. Every pound is backed by HM Treasury, you can hold up to £50,000, prizes are tax-free and the top prize is £1 million. That is a genuine advantage, and we are not going to pretend otherwise.

Chip Prize Savings suits people who, going by Chip’s own odds claim, want a better chance of a smaller prize on a modest balance, who like having it in the same app as their other savings, or who are joining Chip anyway and want their £1,000 for the £50 referral bonus to sit somewhere with a prize draw. You only need a £10 minimum average balance to take part.

And if what you really want is a predictable return on your savings, neither is the best tool. A standard savings account pays interest you can count on; Chip’s Instant Access, for example, pays 3.51% AER for 12 months, then 3.00% AER.

Side by side

Chip figures come from Chip’s Prize Savings page. Premium Bonds figures come from NS&I’s Premium Bonds page and the NS&I home page, checked on 16 October 2026. Prize funds and odds change, so check both before you decide.

Eligibility criteria apply. The £50 is for people who have never held a Chip account, who deposit £1,000 into an eligible account and keep at least £1,000 there for 90 days in a row.

How each one works

Both swap interest for a monthly prize draw. With Premium Bonds, each £1 you put in buys one Bond, and each Bond is entered into a monthly draw. NS&I says new Bonds wait a whole month before their first draw. Prizes run from £25 to £1 million.

With Chip’s Prize Savings Account, your entries are based on your balance over the month, and you need a £10 minimum average balance to take part. Chip advertises its prize pool month by month: for October 2026 it is £100,000 a month, with a Grand Prize of £10,000. You can access your money any time.

Our full guide to Chip Prize Savings covers the draw in more detail.

Prize fund and prizes

Premium Bonds publish a prize fund rate; Chip publishes a monthly pool. NS&I’s prize fund rate is 4.35%, variable. That is the total prize money paid out as a share of all Bonds, not what you will earn. NS&I itself is clear that most holders win less than the prize fund rate, because a few large prizes pull the average up.

Chip advertises a set pool instead: £100,000 a month for October 2026, with a £10,000 Grand Prize. Chip does not publish a prize fund rate in the figures we check, so you cannot directly compare the two pools as a percentage of savings.

Put simply, Premium Bonds offer a life-changing top prize of £1 million alongside many small ones. Chip’s top prize is much smaller, at £10,000.

To make the prize fund rate concrete: on £1,000 in Premium Bonds, a 4.35% prize fund rate is equivalent to £43.50 a year on average, but most holders will win less than that and many will win nothing. Our guide to what AER means explains why a prize fund rate is not the same as an interest rate.

Odds and Chip’s 3.5x claim

Chip claims better odds of winning a prize, but read the small print. Chip’s page says it offers 3.5x better odds than Premium Bonds (Chip's own claim). Chip’s footnote explains the basis: “Based on odds of winning any prize per £10 held with the Chip Prize Savings Account vs £10 held with NS&I Premium Bonds in September 2025.”

Three things to take from that:

• It is Chip’s own claim, not an independent figure.
• It is odds of any prize. Most prizes in both draws are small. Better odds of winning something are not better odds of winning a big prize.
• It compares against September 2025. Premium Bond odds and prize fund rates change, and NS&I’s current figures may differ from the ones Chip compared against.

For Premium Bonds today, NS&I gives odds of 21,000 to 1 per £1 Bond each month. With £1,000 in Bonds, that works out at roughly one prize every 21 months on average. In Chip’s draw, £1,000 is 100 times the £10 minimum average balance, but Chip does not publish odds per entry in the figures we check.

No interest either way

Neither pays interest. Chip says plainly that the Prize Savings Account does not offer interest. Premium Bonds are the same: prizes replace interest.

That has a cost. On £1,000, Chip’s Instant Access Account would pay about £35.10 in its first year, then £30.00 a year at the standard rate, with no luck required. If you win nothing in a prize draw, you have given that up. With rising prices, money that earns nothing loses spending power over time.

Chip’s Smart Cash ISA pays 4.68% AER for 12 months, then 3.50% AER, tax-free. For a side-by-side of every Chip rate, see Chip interest rates, or compare your own balance in the savings interest calculator.

Chip’s prizes-not-cash rule

A Chip prize is not money you can spend straight away. Chip’s terms say: “Prizes are not cash and are applied to your Chip account as a bonus. Prizes become cash once you withdraw your entire Prize Savings Account (“PSA”) balance into your linked bank account. Prizes are not eligible for entry calculation or FSCS protection.”

In practice, that means prizes are added as a bonus and become cash only when you withdraw your whole Prize Savings balance. If you want to keep your Prize Savings balance in place and spend a prize, you cannot do both. Prizes also do not count towards future draw entries, and they are not FSCS-protected while they sit as a bonus.

Premium Bond prizes are paid as money and, as NS&I says, they are tax-free.

Treasury backing vs FSCS

This is the biggest difference, and Premium Bonds win it. NS&I is backed by HM Treasury. Its website says it secures 100% of savings, including amounts above £120,000. Premium Bonds are not covered by the FSCS because they do not need to be.

Chip Prize Savings is held with ClearBank. Chip savings are held with ClearBank and eligible deposits are protected by the FSCS up to £120,000 per person, shared across all your money at ClearBank. So the limit is shared with your Chip Instant Access and Easy Access balances, and with any money you hold at ClearBank through other apps. Chip’s prizes, and any £50 referral bonus, are not FSCS-protected either.

For most balances FSCS cover is ample. It is still a step below a full government guarantee of every pound. Our guides to whether Chip is safe and FSCS protection with savings apps explain how the shared limit works.

Limits and withdrawals

Premium Bonds have a £50,000 cap, every pound of it Treasury-backed. The minimum is £25. Open to anyone 16 or over with a UK bank account; parents can hold Bonds for under-16s. You can cash in all or part at any time, online, by phone or by post.

Chip Prize Savings needs a £10 minimum average balance to enter the draw. We have not found a published maximum in the Chip figures we check, so look in the app if you are thinking of a large balance, and remember that FSCS protection stops at £120,000 across ClearBank. You can withdraw any time, but a full withdrawal is what turns prizes into cash.

Costs and saving automatically

Both are free to hold. Premium Bonds cost nothing to buy or cash in. Chip’s Basic plan is free. If you use Chip’s autosave on the free plan, autosave costs 45p per autosave, while recurring deposits are free on both plans. Check in the app which account an autosave or regular deposit pays into before relying on it to top up Prize Savings.

The £50 sign-up bonus

Chip Prize Savings counts towards Chip’s referral bonus; Premium Bonds have no sign-up offer. A new customer who joins through a referral and deposits £1,000 or more into the Smart Cash ISA, the Instant Access Account or the Prize Savings Account, then keeps at least £1,000 there for 90 days in a row, gets £50, and so does the person who referred them. Note that if your balance drops below £1,000 at any point, the 90-day countdown starts again from zero.

The Easy Access Saver does not count, you must have never held a Chip account before, and everything has to be done within 120 days. The bonus is paid into your Chip Instant Access Account (or Prize Savings Account if you do not have one) and is paid at Chip's discretion. Not sure you qualify? The bonus checker takes five questions.

Where Premium Bonds win

We earn from Chip referrals, so here is plainly where Premium Bonds are the better choice:

• Government backing. HM Treasury secures 100% of your money, with no shared limit.
• A large, clear holding limit. Up to £50,000, all of it fully backed.
• Life-changing top prize. £1 million, against Chip’s £10,000 Grand Prize.
• Prizes are money, and tax-free. No need to empty the account to spend a win.
• A published prize fund rate. 4.35%, so you can see the average payout.
• For younger savers. Open from 16, and parents can hold Bonds for children.

Who should choose which

If neither prize draw appeals, our Chip alternatives page covers other ways to save, including fixed rates and banks.