Yusra3
VIP Contributor
A bit miserably premium bonds at the first glance seem like very thrilling way to win tax-free prizes instead of traditional bank interest. However, can they make an adequate return on your money versus the other funded projects?
What Are They?
NS&I issues premium bonds that are similar to savings bonds where you save instead of earn fixed interest, while each way you contribute your money to the prize draw. Instead of routine interest payments, you have a random selection process for winning a tax-free prize starting from £25 that could go up to £1 million.
How Do They Work?
The minimum purchase amount is £25 up to any total of £50,000 and you are entitled to hold up to £50,000 per person. For £10 from every bond purchase, one entry into the draw is awarded. The more bonds you buy, the more can you be in the chance to win awards. Bond holders may anytime redeem their account, pay out the remaining balance and get their funds.
Are They Worth It?
To reflect the expected average luck, premium bonds would remain competitive with other savings rates while giving a chance to win extra money but with risk involved. But on the side, they might be suitable for gamblers who love gambling and winning prizes. Remember to invest in bonds along with the other cash savings, provisions may be required. However, investing wholly in these premium bonds or over pausing on the chances of unlikely grand prizes does not look economically perceptible.
Although the premium bonds act as spicing to frequent savings interest, they should not play a role in a systematic retirement planning because well tested wealth accumulation strategies are required. Review the risks and possible tax consequences before you invest.
What Are They?
NS&I issues premium bonds that are similar to savings bonds where you save instead of earn fixed interest, while each way you contribute your money to the prize draw. Instead of routine interest payments, you have a random selection process for winning a tax-free prize starting from £25 that could go up to £1 million.
How Do They Work?
The minimum purchase amount is £25 up to any total of £50,000 and you are entitled to hold up to £50,000 per person. For £10 from every bond purchase, one entry into the draw is awarded. The more bonds you buy, the more can you be in the chance to win awards. Bond holders may anytime redeem their account, pay out the remaining balance and get their funds.
Are They Worth It?
To reflect the expected average luck, premium bonds would remain competitive with other savings rates while giving a chance to win extra money but with risk involved. But on the side, they might be suitable for gamblers who love gambling and winning prizes. Remember to invest in bonds along with the other cash savings, provisions may be required. However, investing wholly in these premium bonds or over pausing on the chances of unlikely grand prizes does not look economically perceptible.
Although the premium bonds act as spicing to frequent savings interest, they should not play a role in a systematic retirement planning because well tested wealth accumulation strategies are required. Review the risks and possible tax consequences before you invest.
