With interest rates close to zero, a savings account that offers the chance to win big is sorely tempting – but it may not pay in the long run.
Three major banks and building societies now offer a lottery-style savings account.
Like much-loved Premium Bonds, you are entered into a prize draw each month, with any winnings tax-free.
Try your luck: Three major banks and building societies now offer a lottery-style savings account
Some – such as NatWest’s new deal launched earlier this month – promise a modest interest payment on top. To be eligible, savers must be a current account customer and open NatWest’s Digital Regular Saver by midnight tonight.
They must then deposit between £1 and £50 in April, May and June to qualify for a draw in July.
There will be ten prizes of £1,000 each. And the bank says the odds on winning will depend on how many sign up this month.
Savers will also earn 3 per cent on their first £1,000. But while this looks attractive, it works out to just £9.75 in interest if you save the maximum £50 every month for a year.
Nationwide launched its prize draw offer in February last year, offering £100 giveaways.
So far the building society has attracted 245,500 savers and handed out 2,659 prizes worth £265,900.
You have between a one-in-34 and one-in-67 chance of winning. You will also earn 1 per cent on your savings – worth up to a maximum of £6.50 a year.
Halifax introduced its prize draw nearly ten years ago. You need to hold £5,000 in a qualifying savings account and register. So far it has paid out £57 million to 105,000 savers.
The odds on winning are unknown – but, every month, more than 1,600 savers have the chance to win between £100 and £100,000.
There are 1,500 prizes of £100, one hundred of £1,000 and three of £100,000. You will also earn up to 0.05 per cent in interest.
Post Office Money also has a scheme open until the end of April for those who deposit £1,000 in savings. There is a top cash prize of £10,000, four of £2,500 and 200 of £100.
Smaller societies with prize draws include Family BS’s Windfall Bond and Hanley Economic’s Potteries Prize Saver.
The most popular prize draw savings account is National Savings & Investments’ Premium Bonds, with monthly prizes of between £25 and £1 million.
You can put in between £25 and £50,000. The odds of winning are 34,500 to one for each pound.
Rachel Springall, finance expert at Moneyfacts, says: ‘We could see more prize draws enter the market, but it’s important that customers compare deals carefully. There is no guarantee of winning a prize.’
