Posted By Babavip 25 days ago
Premium Bonds - Making Money From Them
In the late 1950s, premium bonds were used to draw the attention of citizens, and convince them to invest their money in the British government. The concept was intended to be similar to a lottery. The average citizen had the ability to save their money while gaining the added benefit of winning a prize of millions of pounds.
Their popularity seems to be growing larger every day. Almost 1/3 of the population holds a minimum of one premium bond. They are simple enough to buy and can be purchased from a post office or from investment firms. There is a large amount of the population investing in them, but many people are starting to wonder if they are wasting their hard-earned money.
So why do so many people invest in premium bonds? The economy is to blame. Interest rates are decreasing at a rapid rate and they offer a more protected way to invest money. In addition, people gain the opportunity to earn more money each month. The prize money that is awarded is divided into sections: 15% goes to high cash prize winners; 15% goes to medium-level prizes; and 70% is allotted for lower level prizes. At those percentages, a premium bond holder can at least earn a decent investment return, even on the lower level prizes.
There are a few restrictions though; first you are required to spend a minimum of 100 pounds to be able to invest in a premium bond. Second, you are limited to 30,000 pounds per account. Even with such small restrictions, the investment can serve the purpose for which you intended.
There are a variety of reasons that UK residents invest in premium bonds. Parents invest in them to ensure that a child's college can be paid for. Younger adults invest in them to ensure that they have something to fall back on during their retirement years. Senior citizens invest to provide a means for final expenses upon their death, and to leave something for their families.
No matter what the reason for investing may be, most people are confident in their choice to buy premium bonds. They are protected and insured by the country's national treasury. One can be used to win prizes repeatedly. If one does win in a prize category, the winnings do not have to be claimed for tax purposes.
It's simple to find out if your premium bond number is a winner. You can go to the website for the National Savings and Investment. You can check your numbers against the list of winning numbers posted on the site. If you find that you have a matching number, you can contact the right department for prize claims.
In reality, it is a matter of opinion. The choice to invest in premium bonds is up to each individual. Some people like the idea that their money will be available if they choose to withdraw. Others like the lottery-type excitement, and invest only for that purpose. Most investors share the belief that investing in more bonds will give each individual more opportunities to win prizes, even if the statistical odds of winning decline when there are more of them circulating. Ultimately, the choice is left to you.