National Savings Premium Bonds

Harold Macmillan introduced national savings premium bonds in 1956. These are government bonds that are priced more than par. There are about 23 million holders of premium bonds in England. This bond is issued under the National Savings and Investments scheme by the government of UK. These bonds provide a secure as well as easy way to save money as well as provide a chance to win prizes that are tax free. It guarantees that the capital of investors remains safe hundred percent.

Premium bonds are of two types. They are callable and non-callable bonds. An investor in national savings premium bonds basically invests money in the government. The government does not pay interest to such bondholders. It gives the bondholders offers to win prizes that are tax-free. Joint holders cannot invest in premium bonds.

The bonds cannot be transferred to another person. The main advantage of investing in these bonds is that all the bonds could be cashed whenever you want to. The holder of the bond is given a series of numbers for every 1 pound invested. On the purchase of hundred pounds worth of bonds the bondholder would receive hundred bond numbers. This implies that the bondholder receives hundred chances of being able to win a prize. The Electronic Random Number Indicator Equipment is a machine that generates random numbers. A draw is made every month. The bondholder has a chance of winning in the range of 50 pounds to 1,000,000 pounds. The prize money does not attract the UK Income and Capital Gains Tax.

An application form for the national savings premium bonds is available at the post office or could be bought over by phone. You could also download the application from the Internet. An investor will have to invest an amount of hundred pounds at least. The bonds are sold in multiples of 10 pounds. An investor could hold a maximum of 30,000 pounds. People should be either 16 years of age or above to be able to apply for these bonds. Premium bonds could be bought by guardians or parents of children less than 16 years of age.

National savings premium bonds are a safe and reliable way to invest money. People are always worried about their cash as the times are bad, so, there is no risk to store your money in these bonds. You are also guaranteed good returns on the amount you have invested. People who are bored of investing in predictable schemes would find premium bonds very interesting as you are guaranteed to win a good amount in prize money without the tension of losing your capital which is possible when you are playing the lottery. Go for premium bonds as they are a government enterprise and there is no chance of you making a loss on investing in them. Winning prize money also brings in an element of excitement!