Customers with more than �5,000 held in a Halifax or Bank of Scotland savings account can enter a monthly draw with the chance to win up to �100,000
Halifax bank is setting itself up as an alternative to one of the UK's favourite savings schemes: National Savings & Investments premium bonds.
From December, the bank will operate a free monthly prize draw for customers with balances of �5,000 or more in a Halifax or Bank of Scotland savings account who opt in to the competition. Prizes range from �100 to �100,000. Each month the bank will hand over three �100,000 prizes, 100 �1,000 prizes, and 1,000 �100 sums ? �500,000 in total.
All prizes are free of tax and will be awarded in addition to any interest paid ? rates on Halifax's savings accounts are currently between 2% and 4.4% ? but the chances of winning are very small indeed: the bank says it has millions of customers with �5,000 or more in savings accounts.
Halifax refused to reveal exactly how many people were entitled to register, or what the odds would be if they all took advantage of the offer, but if just a million savers registered, the odds of winning any prize would be one in 917, or one in 333,333 for one of the three �100,000 jackpots.
In contrast, the odds of winning a prize through ownership of an NS&I premium bond are 24,000 to one, starting with nearly 2m �25 prizes rising to one jackpot of �1m. The prize fund totals almost �1.8m a month, all tax free. NS&I bonds cost �1 each and investors must buy at least 100.
A spokeswoman for Halifax denied it would be fairer to distribute the prize money through higher interest rates to all savers. "The amount the prize draw comes to doesn't translate to a significant interest rate change," she said. "It would make a very small difference, and we consider that we do have strong rates out there already."
Kevin Mountford, head of banking at Moneysupermarket.com, said: "The monthly prize draws could be dismissed by some as a marketing gimmick, with Halifax rewarding customers who have developed 'positive savings habits'. But there is no doubt this campaign will have wide appeal to both new and existing customers.
"While any initiatives by providers that could help savers earn extra money should be applauded, it remains clear that most savers are earning very low rates at present, and yet there are many providers offering at least six times more than the current base rate.
"So savers need to make sure they are regularly checking their rates and switch accounts if their money isn't working hard enough for them."
The draw launches on 3 October but customers, who must be aged 18 or older, can register prior to this by at filling in a form or calling 0844 571 50 76. Each registered saver is entitled to one entry a month, regardless of how much they have deposited in excess of �5,000.
For joint accounts, each account holder must register individually, and the money held in the joint account will be treated as being split equally between each account holder, so for both to qualify the account must hold at least �10,000.
Source: http://www.guardian.co.uk/money/2011/sep/21/halifax-premium-bond-style-prize-draw
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