Best for Luck (Premium Bonds) |
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 Premium bonds are a great gift for children. They are a fun investment, offering the holder the chance to win a tax-free prize of up to £1 million while guaranteeing their money back at any time. They are also underwritten by the government and so are nice and secure. |
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| The scheme is run by National Savings & Investments, the government-backed savings company. With 23 million people (more than a third of the UK population) holding £26 billion worth of Premium Bonds nationwide, they are one of Britain’s biggest financial success stories. |
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 The chances of winning a single prize in any month with a £1 premium bond are 24,000-1. So, if you invest the minimum £100 in premium bonds, your chances of winning a prize are 2,400-1 each month – much better than the lottery.
And totally unlike the lottery you can cash in your bonds and get your money back at any time. |
A Fun Gift |
| Anyone – including children – can hold premium bonds up to the value of £30,000 at any one time. National Savings says that those holding the full £30,000 in premium bonds stand an average chance of winning 15 prizes every year. These can range from £50 right up to the big one - £1 million. |
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 Premium Bonds have become so popular in the last ten years that the company has doubled the number of prizes it now offers. Each month, there are now two £1 million winners and two £500,000 winners.
There are also hundreds of £50 and £100 prizes awarded every month.
The value of prizes given away each month is linked to the bank base rate. National Savings aims for the total prize fund – that is the value of all the individual prizes put together – to be between 1% and 2% below the current bank base rate.
For serious savers this means that there are better investment options – a regular high interest account, for instance. But Premium Bonds are about far more than that.
It’s the flutter factor that gets Britons of all ages going and that is why, 50 years after Premium Bonds were established by the government, 40% of the population have joined in.
Also, who every heard of giving a child a high interest account as a gift? |
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Pros
- It could be you
- Winnings are tax-free
- Your capital is secure
- Easy to buy as a gift
Cons
- No substitute for more serious savings schemes
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