Monday, April 7, 2008

Invest In Premium Bonds

As far as investment is concerned, many people prefer to put their money in saving bonds, real estate or stock market. If you have never heard of premium bonds, perhaps this will be the best time to consider them in your portfolio. They offer investment in a fun way. Looking at most bank savings, you are given a fixed interest rate. You don't make much money this way provided you have large funds to place in the savings. The low interest rate on a money market or saving accounts offers very little return which is not justified to purchase a larger home or a brand new car. If you want to redeem it, you may have lose the interest.

Investing in the stock market can exhilarating because you may heard that people make tons of money during the peak of the share prices. As you know the market don't stay high all the times.
A premium bond like the UK one will not give you any interest. But you have something better instead. You can participate in the lottery where you can probably win a million dollars every month. The grand prize of one million dollars are drawn twice a month along with other cash prizes.

Supposing you have invested 10,000 pounds, then your odd of winning is 19%. This can be translated into numerical figures for some people who prefer that way. It means that 1 in 21,000 stands a chance to win the cash prize. This is what make the premium bonds exciting. Unlike the saving accounts where you already know how much you are getting at the end of the day, these bonds provide the element of surprise and excitement.

These bonds are favorites among the British people. More than one third of the population buy these bonds. As you are aware of, the saving accounts and government bonds are fixed. Once you have agreed with the interest rate that they offer, it will stay that way no matter how the economic climate turns out to be. You will not get anything extra when the bank or government makes more money on these debt instruments. The problem with these notes is that you will lose the interest if you decide to redeem early. Usually these investment will only mature after 10 or 20 years. Some may be even longer.

On the other hand, you can redeem your money any time without losing the face value because there is not interest to profit from. Remember there is no guarantee in winning the cash prizes. All you have are the chances or possibilities to win. The smallest payout is anytime better than the interest rate that the bank or government offers you.