Zakat on Premium Bonds
Premium Bonds count as cash savings for Zakat purposes. The full face value of your NS&I Premium Bonds — the amount you invested — is zakatable at 2.5% on your Hawl date. Prizes won are added to your general wealth and included in the same calculation.
The ruling: Include the total face value of your Premium Bonds in your zakatable wealth. Add any prize winnings held in your account. Pay 2.5% on the combined total alongside all other zakatable assets above the Nisab threshold.
What are Premium Bonds?
Premium Bonds are a savings product issued by NS&I (National Savings and Investments), a government-backed savings provider. Instead of paying interest, NS&I enters all bondholders in a monthly prize draw. Prizes range from £25 to £1 million. Your original investment is always fully guaranteed and redeemable at face value — there is no capital risk.
As of 2026, British Muslims collectively hold millions of pounds in Premium Bonds — the no-risk, no-guaranteed-interest structure appeals to those seeking to avoid riba.
Worked example
Khalid holds £10,000 in Premium Bonds. In the past year he won £150 in prizes, which he has kept in his NS&I account. His Hawl date is 1 Rajab.
Are Premium Bond prizes halal?
The scholarly view most widely followed in the UK is that Premium Bond prizes are permissible to keep. The reasoning:
- The prize is not contractually owed — NS&I does not promise to pay you anything above your invested capital
- The mechanism is a prize draw, not interest (riba) — you are not paid a return on lending money
- Your capital is not at risk — unlike gambling, you cannot lose your investment
Some scholars disagree and consider the element of chance (maisir) problematic. If you are unsure, follow your own scholar's guidance. For Zakat, include the prizes in your wealth if you hold them.
Frequently asked questions
Is Zakat due on Premium Bonds?
Yes. Premium Bonds are treated like cash savings for Zakat purposes. The full face value of your Premium Bonds holding counts as part of your zakatable wealth on your Hawl date. You pay 2.5% Zakat on the total value of your bonds (not on prizes won).
Do I pay Zakat on Premium Bond prizes?
Prizes won from Premium Bonds are treated as income — similar to interest. The majority of scholars consider Premium Bond prizes permissible to keep (unlike bank interest, they are a non-guaranteed lottery-style prize not contractually paid). Once a prize lands in your account, it becomes part of your general wealth and is included in your next Zakat calculation at 2.5%.
Are Premium Bonds halal?
This is a debated question among UK Islamic scholars. Some hold them as permissible because prizes are randomly assigned (not contractual interest) and there is no capital risk — NS&I guarantees the return of your initial investment. Others consider them impermissible due to the element of chance resembling gambling (maisir). If you hold Premium Bonds, follow your own scholar's guidance on permissibility. For Zakat purposes, if you hold them, include their full face value in your calculation.
How do I include Premium Bonds in my Zakat calculation?
On your Hawl date, note the total face value of your Premium Bonds (the amount you invested, not including any prizes). Add this to your other cash savings, gold, silver, and investments. Pay 2.5% on your total net zakatable wealth above the Nisab.
Can I deduct any outstanding prizes not yet credited?
Uncredited prizes (prizes won but not yet paid out or reinvested) are treated as receivables — money owed to you that you will definitely receive. Include them as part of your zakatable wealth on your Hawl date.
Include Premium Bonds in your Zakat calculation. Our calculator has a savings field — add your Premium Bonds alongside other cash savings.
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