National premium bonds

National premium bonds are a bond offered by a government backed organisation called the National Savings and Investments.

Approximately £100,000,000.00 is won in premium bond payouts every single month. The premium bond winnings are paid tax-free which is of particular note to higher rate tax payers. The premium bond system works like a lottery, you place an investment and instead of interest you get entered into a draw. If your numbers come up you can win up to a million pounds. And even if you don't win you get your initial investment back. This sounds great to start with but consider that your initial investment is likely to devaluate in real terms due to inflation. The government promises to buy back the bond, on request, for their initial price. The price paid however is likely to be of a lower actual value than when you purchased the bonds. The draw is conducted so that the winners of the Jackpot is the first working day of the month will be announced, although the actual date of the draw varies for administrative reasons. Bonds are currently sold in multiples of 10, with a value of £ 1 per bond and a minimum purchase of 100 bonds (or) 50 bonds for payment by standing order.