Premium Bonds Facts

Apart from savings, premium bonds also offer the opportunity of safe gambling. They are better than the traditional lotteries because you don't lose money if you don't win any prize. You can continue to try your luck every twice a month for as long as your bonds are still in your hands. You just invest once and you can play for a lifetime. Young or old can benefit from these bonds.

Every bond carries a unique number. A machine will collect all these numbers and then generate the winning numbers. Winners will receive cash prizes instead of interest. This is a secure investment because it is guaranteed by the government. You can also cash in whenever you want and you don't lose a single cent. You can only buy up to 30,000 pounds worth of bonds. The limit is to prevent large corporate bodies from buying in millions so that common people like you can stand a chance to win.

You can increase your chances of winning. If you have a lot of premium bonds, you can increase your odds of winning the grand prize which is worth one million pounds. With 30,000 bonds, your numbers will have a better odd which is 400,000 to 1. The more you save the better your future will be.

The selection of number is random. This means the more numbers you have in your hands, the higher your chances of winning the cash prize.

You can buy the bonds on the Internet or over the phone. Alternatively, you can visit your local post office to purchase them.

Three simple process: buy, save, and win. However, you are not guaranteed to win any cash prizes. These bonds are useful especially when you urgently need the money or you retire.

You need to be at least 16 years old before you can buy them. You can also buy for your children if you plan their education fund. It would be nice to have some money when you start your family provided you started saving at the early years.

The cash prizes are free of taxes. So, when you win 1,000,000 pounds, you get to keep all of them. You can use the money to pay for your college or settle debts. You can do anything with it. So, are you reading to invest in premium bonds? The smallest cash prize of 50 pounds is still something. Just look at the interest rate that your saving account is offering.

Premium Bonds Are Better Than Lottery

One of the uprising stars in the investment portfolio is premium bonds. Although many have place their money in these bonds, there are some quarters begin to doubt if they are a worthwhile investment. The first premium bond was brought into existence in 1956. The British government used this instrument to persuade the citizens to save money. Unlike any other security or treasury bond, it does not give any interest. Instead it offers cash prizes which are worth more than a million pounds. It provides opportunities to the lower income group to win one million pounds using a lottery. About 20 million people in UK hold at least one premium bond. This represents one third of the population. They can buy these bonds from the post office or the National Savings and Investment agencies.

When the interest rates drop, these bonds seem to be a secure avenue for investing. At the same time, investors will the excitement to win one million pounds in cash every twice a month. The top prizes are about 15% of the total prize money allocated. Another 15% is allocated for the mid range prizes while the remaining 70% goes into small prizes with the smallest that carries the value of 50 pounds.

A 50 pound prize is equivalent to a 500 percent return as each bond is one pound. Your chances of winning is 1 in 21,000 but as the bonds become more popular, the odds may turn against you.

You can start with 100 pounds but the cap is set at 30,000 pounds. The government guarantees your investment but not the odds of winning cash prizes. This guarantee allows you to sleep peacefully every night without worrying about losing your hard-earned saving.

The minimum age for an investor in premium bonds is 16. Many parents buy these monetary instruments for their children's education funds. If your children start investing early, they will appreciate the value of money. In addition, the possibilities of winning sufficient money in helping them to start life are great.

Using the same bond, you can continue to play the game as long as you like. It makes sense if you have more bonds, then your odds of winning get better. Since the prize money is tax-free, you can reinvest the money into the bonds again until you hit the limit of 30,000 pounds. However, during the last decade, the chance of winning has drop. This is due to the fact that the market has a lot of bonds which lower the probability of getting your number selected.

Nevertheless, you still have an upper hand compared to the American Lottery because you can use the same premium bonds over and over again. You can check online for the premium bond draw results. Should your numbers match the ones on the listing, then you contact them and claim your money. Till today more than 500,000 unclaimed prizes are sitting in the National Savings and Investment agency.

Premium Bonds For Non-British Citizens

For the British, premium bonds are the mostly sought after for the purpose of saving. The government will guarantee your money whether you invest 100 pounds or 30,000 pounds. They help the government to finance public projects. They also offer opportunities for the certificates owners to win cash prizes which worth more than a million dollar through the monthly lottery. Unlike other financial notes, you can cash in anytime. You also will get back the money which you invest if you don't win the lottery. Therefore, they are not only investment but also offer fun activities through cash prizes.

So, who is eligible to buy these bonds? As long as you are a resident in Great Britain with the minimum age of 16, you can invest in these saving funds. For the younger generation, they can start their own education fund. For the mature market, it offers a cushion during the bad times or prepares an good lifestyle after retiring.

You don't have to worry about losing your money. Moreover, you have a chance to win 50 to a million bond if your bond number is selected as the winner. In any month, there will be at least two investors who will turn into millionaires.

The postal regulation do not permit mailing of bonds or cash prizes. If you are not a British, you can still buy these bonds provided that you are willing to travel to Great Britain to buy them in person. You can buy directly from the post offices or the National Savings and Investment agency. If you happen to be the winner of the draw, then you need to plan a trip to Great Britain to collect your winning prize. Now when it comes to taxation, you would not be taxed for the cash prize in that country. However, you have to check with your own federal income tax and find out the amount of money you can bring back that is free of tax.

You can redeem the bond at the cash value without loss. As a non-British certificate holder, you may need money and you would travel to Great Britain to convert your bonds into cash. However, you may have to pay certain fees to carry your money back to your homeland. It depend on the amount. In addition, you may need to check the restriction on traveling with large amount of cash. Therefore, you can arrange with the local banks to have your money transfer to your account in your homeland.

You also need to consider the ups and downs of the currency pound. During the exchange of currencies, you may lose some money as the pounds appreciate. Therefore, you need to keep an eye on the money market closely so that you know when is the right time to cash in your bonds.

If you want to protect your investment, you can arrange an agreement with a British resident to buy the bonds on your behalf. When the purchase is made, your counterpart will own the title of the notes. You will have a legally binding agreement with the person so that you can redeem your bonds for cash or claim the money prizes. For the benefit of your counterpart, you will offer an agreed percentage of the prize money. In such cases, you should use a British lawyer and your own attorney of your country.

I hope this article will help those who want to invest in UK premium bonds. You don't have to be a resident in the United Kingdom to buy these notes. In fact, anyone can buy them provided you follow the regulations as laid out by the government of Great Britain.