Premium Bonds

Premium bonds are a savings account type of product offered by the NS&I UK government organisation. They are a basically a lottery where you do not lose any of the money invested, and instead of earning interest on your savings you are entered into a monthly draw for the chance to win cash prizes upto £1,000,000.

Premium bonds started back in November 1956 and were formed and remain organised by the National Savings and investments body. They offer a top prize of £1 million, and the draw each month also offers 1 million other smaller prizes. 

The minimum holding is £100 and the most someone can save in premium bonds is limited to £30,000, for every £1 invested 1 bond is given in exchange so £1,000 is 1,000 premium bonds each bond is entered into the monthly draw. They can be bought online, over the phone or in your local post office all in one go, or via a monthly standing order to increase the amount of bonds held over time. 

All bonds are entered into the draw one month after they were bought and continue until they are cashed in. Users can chose to do an auto reinvest of any winnings or to take the winnings as cash.

The money is very safe, the investment is backed by the government treasury so you know what you put in you will get back. And if you win the £1,000,000 you will be very happy.

The  odds of winning the £1,000,000 top prize with premium bonds is said to be over 40 billion to 1, due to the fact that over £40 billion is invested in premium bonds. So the odds of winning the euromillions lottery is better!

There is a lot of discussion about Premium bonds and if they are worth investing in or not. They tend to compare interest rates in a savings account, and then the return you may get with premium bonds. The odds of winning the £1,000,000 are high however someone has to win it. The investment is safe, so at least whilst you may not win any money you won't lose your original stake and someone does need to win.