Savings Account or Premium Bonds?

The smaller building societies often offer some of the better cash isa rates.

Me too - max holding of Premium Bonds and I earn more than in any ISA - and it is simple - I know where it is and I do not have to faff around getting new ones.

I agree with you Chestnut. I would say max out the premium bonds first. Then go for cash ISAs.

The current chance of each one pound unit winning is last time I looked 34,000 to 1. So if you had £34000 of premium bonds statistically you would be likely to win one prize each month. The vast majority of the prizes are the £25 prize. so statistically with average luck you could expect to win £300 a year in prizes.

The advantages of keeping a cash ISA rather than just a normal savings account with perhaps a higher rate is that the government could always get rid of the £1000 tax free saving interest allowance in the future.
That's true, but the Premium Bonds won't ever have a tax problem either.

There was a thread about PBs a while back and people said they were winning regular amounts, but most of them didn't say how much they had invested. I was only going to put £19k so not as much as you said. People with £20k said they were winning £25 most months which would be good enough.

I have the maximum number of premium bonds. As interest rates are insultingly low, any prize even a £25 one, gives you a greater return…

I’ve got both cash ISAs and premium bonds.
If you are going to keep the cash ISA then you should transfer it to another cash provider with a better rate. You can easily get 0.8% easy access and higher if it’s fixed term or restricted access. The advantages of keeping a cash ISA rather than just a normal savings account with perhaps a higher rate is that the government could always get rid of the £1000 tax free saving interest allowance in the future. Also it would give you the flexibility to transfer the cash ISA into an investment ISA if you wanted to go down that route.
I like premium bonds and win one or more lots of the £25 prize most months, and there is the thrill of the tiny chance of winning the million pound prize each month. To have a realistic chance of winning the £25 each or most months you do need quite a large amount of premium bonds. Personally I think the thrill of seeing whether you’ve won the big prize each month alone makes them worth it. Some people describe premium bonds as effectively gambling the inters you would have got if it was in a regular savings account or cash isa. Another way of looking at it is being like a lottery but you keep the initial stake.

One needs a considerable number of premium bonds- £40k + for you to win small amounts regularly.

I would find the highest interest-paying account but one which is flexible because interest rates will rise this year. When you think it is at its highest, find the best fixed rate and pop the money in there for a few years.