Premium Bonds pay out winnings to some lucky holders every month (Picture: PA)

While winning millions on the Lottery sounds like a dream come true, it’s something few of us will have the chance to attain.

But while it might seem like an impossibility to nab that jackpot, there’s other ways you can try your luck at winning some extra cash.

One of those is by investing in Premium Bonds – and while you might not nab the sort of sums that the likes of Euromillions might offer, you can still get yourself a comfortable little nest egg if you’re lucky.

Just how do Premium Bonds work though, and how can you find out if you’ve won?

How do Premium Bonds work?

Premium Bonds, often thought of as a cross between a savings account and the Lottery, are a savings product from National Savings and Investments (NS&I).

However, instead of earning interest on your money you are entered into a monthly prize draw.

If your Premium Bond number is the one chosen, you could be in line to win anything from £25 through to £1m.

Statistically you have more chance of winning a smaller prize, with just two people a month bagging the million – but of course it’s the luck of the draw, with the odds of winning a prize in any given month around 24,000 to 1.

Could you be one of the month’s £1m winners? (Picture: Getty Images)

You don’t need to have invested a minimum amount to be in with a chance of winning – as little as £1 will be enough for you to be entered into the draw.

However, you’ll have more chance of winning if you have more numbers in the draw.

The prizes are picked at random by a number generator called ERNIE, which stands for Electric Random Number Indicator Equipment, and it chooses the winners so that there is no unfair advantage.

Anything you win is tax-free – so many people opt for this as a way to save or invest their money.

You can find out how to invest at the NS&I website.

How can you find out if you’ve won?

 Just head to the Premium Bonds website prize checker and enter your holder’s number.

The holder’s number can be found by logging into your account. It’s the number with nine or 10 digits, or eight digits followed by a letter.

Or, if you don’t know your holder’s number you can download the Premium Bonds prize checker app and use your NS&I number to see if you’ve won.

Your NS&I number is 11 digits long and will begin with 11, 21, 31 or 41.

MORE : Retired nurse wins almost £400,000 on People’s Postcode Lottery

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