Monday, April 7, 2008

NS & I Premium Bonds

The idea of premium bonds were first came about in 1861. The purpose of these funds is to help the commoners to save and invest their money for the protection in the event of accident or death. It was formerly known as the Post Office Saving Bank. People started to buy more notes. The Chancellor needed money for the public projects and he received financial help through the funds. In this way, the premium bonds began to serve a dual purpose.

It was a secure investment for the people. They don't need to be afraid the funds go bankrupt or depreciate in value. On the other hand, it served as a source of funding for the government when the taxes and other financial instruments are insufficient.

The Post Office Bank issued saving certificates along with the lottery system. In 1957, they released the lottery once a month to encourage more personal investment from the British citizens. The Treasury Department took over the management of the bonds from the Post Office management in 1967. The Post Office Saving Bank was changed to the National Savings and Investment (NS & I). The Post Office from then on supplied most of the premium bonds to the public.

The NSI has two functions; source of other investments and premium bonds. In 1996, the Post Office turned into the store of the agency. By then the National Savings and Investment worked closely with the Chancellor. Anyone who want to invest in this fund will drop by any post office and spend 100 pounds for the purchase of a bond. The maximum investment for each person is 30,000 pounds.

In 1999, Siemens Corp joined the agency. The modernization of the agency began when the Siemens schools of business trained more than 4000 workers of the agency in the area of investment strategies. They became more professional in the delivery of the investment services. The agency increased the number of call centers and engaged new computer technology in managing the investment portfolios. The contract between Siemens and the National Savings and Investments will be terminated in 2014. Hopefully by then, the agency will be able to run the operation on its own.

The training has helped the employees to improve the customer service and to attract more investment opportunities. The Internet helped in better communication between them and the customers. The National Savings and Investment (NS&I) will offer better services to their customer as more people are beginning to invest their money in premium bonds.

For the last ten year, this fund has bloomed tremendously. If the growth is poor, then you will enjoy a higher probability of winning the draw. According to statistics, as the population increases, it decreases the odds on getting your number selected. During the bad times, many investors will switch their investment to traditional low interest saving accounts. Therefore, this will reduce the number of premium bonds in the market which will increase your chances of winning.