I ditched UK’s most popular savings account – if you’re a customer then you’re a fool.

According to The Sun: Previously, I eagerly awaited the monthly check of my premium bonds, hoping to win the elusive million pounds. However, in 26 years, I only won £25 – enough for one dinner.

When the winning rate dropped to 3.6% this month, I decided to move my funds elsewhere. I withdrew my savings and placed the money into a high-interest ISA where it is guaranteed to grow.

Now, I don't think about that money and I'm confident I will earn hundreds of pounds in interest this year.

Many people in the UK have premium bonds, but I’m sure most of them could benefit more by placing their money into other products.

My shocking odds regarding the probability of winning

I always thought that if I held on to premium bonds long enough, sooner or later I would win a big sum. But I was stunned by the probability of winning – 22,000 to one for each £1 bond in the monthly draw.

The winning numbers are chosen by ERNIE, NS&I's electronic random number generator. Premium bonds have an annual prize fund rate of 3.6%, which theoretically means if you invest £1,000, you should receive £36. However, for most people, the actual return is significantly lower.

Only a third of bondholders have ever won a prize, and in many cases, it was just £25. Your chances of winning are significantly better if you invested the maximum amount – £50,000. But I don't have that kind of money, so I know I can get a better return by moving my funds.

Among the 75 winners who won £100,000 this month, only ten had less than £25,000 in premium bonds.

Do you have an unclaimed prize?

If you suspect you might have an unclaimed prize, there are various ways to check, depending on the information about your Premium Bond account.

• If you know your premium bond holder number, go to the NS&I website or download their app to check for prizes. Enter your number, and you'll find out if you have any unclaimed prizes.
• If you don't know your holder number, but you have an NS&I number, you can use it, which can be found in letters from NS&I. You'll also need to provide your surname and password.
• If you don’t know any of the numbers, call NS&I at 08085 007 007 or send them a request for your bond record.
• Alternatively, you can use the NS&I tracing service or the My Lost Account website.
• If you find an unclaimed prize, write to NS&I at NS&I, Sunderland SR43 2SB with as much information as possible.
• Prizes are sent to your home address in the form of a voucher, like a cheque. Unfortunately, it is not possible to receive unclaimed prizes directly into your bank account.

In total, from 18,642 winners in the draw, 11,312 had £50,000 worth of premium bonds.

By choosing a fixed interest account, I guarantee my money will yield returns.

Only a few big prizes on the horizon

I’ve always dreamt about what I would do if the Million agent knocked on my door. But, after learning the number of prizes, I realized that’s more of a dream than a reality.

Out of all the prizes, only 10% are 'high-value' and range from £5,000 to £1 million. Approximately 10% of prizes are of 'medium value' at £1,000 or £500. Meanwhile, 80% of prizes are of 'lower value', with 2,578,741 worth only £25.

This means that even if you win a prize, there's a high probability that you'll receive less than £100.

The number of prizes of different values fluctuates, so sometimes there may be even fewer big prizes.

Rate cuts on the horizon

The winning rate for premium bonds is gradually decreasing, and experts believe it will continue to do so. The current rate of 3.6% is the lowest in two years and significantly lower than the maximum of 4.65% witnessed in September 2023.

NS&I sets its rates to raise funds for the government, so the rate will be lowered when enough money has been raised.

Last year, NS&I announced that it had exceeded its financial goals, hence it will cut them in 2025.

Due to this, premium bonds are unlikely to be competitive any time soon.

High rates being eroded by inflation

Inflation currently stands at 3.8%, which is higher than the winning rate of premium bonds. This means the real value of your money is diminishing.

If your savings don’t grow above the level of inflation, you're financially losing out since you won’t be able to buy as much as before.

Therefore, it's crucial to seek out the best offers.

Right now, the best easy access account offers an interest rate of 4.84%.

For someone with £10,000 in savings, the option of premium bonds may result in a loss of £124.

And if they don’t win significantly, their income could be even lower.

I opened a high-interest account where the rate is 4.73%, so I can now be confident that I will win monthly.

The best savings accounts right now

The best savings account will provide the highest returns on your money so that its value does not diminish through inflation.

Always look to ensure you are getting the highest rate.

For this, you can use a comparison site like MoneyfactsCompare to check rates from different banks.

Don’t forget to check the minimum deposit and terms, including the number of withdrawals allowed per year.

If you want to earn well on savings with access to funds, a easy access account may be a good choice.

Currently, the best easy access account is offered by Kent Reliance with a rate of 4.33%. You can open an account with just £1 and all interest is paid annually.

Meanwhile, Harpenden Building Society offers 4.31%, but you need a minimum deposit of £100 to open it.

If you do not need immediate access to your funds, you can get even more interest from a fixed account.

These accounts offer a higher rate in exchange for locking your money away for a set term, usually between 12 and 24 months.

You can earn 4.63% by locking your money in a fixed account with Aldermore. If you want to avoid paying taxes on your savings, an ISA is an interesting option.

Trading 212’s ISA pays 4.42% on balances over £1. Meanwhile, Charter Savings Bank’s ISA pays 4.31% on balances from £1 to £1.5 million.

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This article highlights the current issues regarding premium bonds and their benefits. With falling winning rates and inflation, it’s important to seek alternative savings options to maximize returns. It’s recommended to check various banking products that could provide a better return on investments.