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Premium Savings Bonds

Premium bonds are by far and away the most popular savings bond in the UK. According to government figures, almost half of the UK has some cash invested in premium bonds. A premium bond could be thought of as a savings bond with an added dimension – the possibility of winning £1 million! Other prize levels of £100,000, £50,000, £25,000, £10,000 and £5,000 – as well as a range of smaller prizes, are available. Premium bonds are run by National Savings & Investments (‘NS&I’), and are a government-backed investment – this means your money is 100% safe when you buy a premium bond.

Why choose NS&I premium bonds?

If you want a safe haven for your capital, a premium bond may be an attractive choice. In addition to security, there are other advantages to premium bonds:-

Are premium bonds a good investment?

The answer to this question really depends on your attitude to risk. Put simply, you should think about what would happen to your money if you invested your savings elsewhere, before you decide to buy one. For example, if you invest £1,000 in a fixed rate bond paying 2.5% over a year, then you know by the end of that year you’ll have earned £25 in interest. With a NS&I premium bond, you may not ‘win’ any prizes over the same period, so your returns could be pretty low. By the same token a few people will win big – so the upsides can be fantastic.

Compare Premium Savings bonds with other investments

It’s tempting to think of premium bonds as being a good home for your savings. And in reality, they can be, but it’s always useful to see what else is available in terms of savings products. You need to make your money work as hard as possible, particularly in the current climate of low interest rates, and other types of savings bond may offer a higher return. The flipside of this argument is that you might invest £2,000 in a premium bond and receive a £1 million prize – so the return could be out of this world! What’s important is to go in with your eyes open – our free service enables you to compare premium bonds and also other bonds and savings products to find the best product for you.

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