It's Gambling Jim, but not as you know it..
 Aug 18th, 2003
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Guaranteed Capital
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Luck of the draw
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Yes
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  Flipper01
About me:
Member since:03.08.2003
Reviews:9
Members who trust:6
Review rated by 20 Ciao members on average: very helpful 
National Savings and Investments Premium Bonds (or good old Prem Bonds for short) are a fantastic way of taking a punt on making some extra cash, with a real low risk. The basic idea is very simple; You buy government-backed bonds (I'll go into how to apply below), and every month, your bond numbers are put into a draw (picked by the famous ERNIE). If your bond numbers match those drawn, you win, anything from £50 up to £1 million (The number of prizes decrease the larger they get, so every month there is one £1m, one £100k, a few £50k, a few more £10k, and then a host of £1,000, £500, £100 and £50 prizes.(Sorry that I don't have the exact numbers, but my latest statement, with the exact odds on, has gone walkabout)
Your capital investment is always guaranteed, and you are able to withdraw your money at any time, in full (or in part, if you need to access some, but want to leave the rest in).The "risk" element, if you want to call it that, is that you don't receive any interest on your money. My personal view on this is that interest rates are at such a low level at the moment, that you don't make a great deal in a bank account anyway. If you then compare to shares and/or other bonds, then the risk level of losing your original stake suddenly becomes a factor. If you actually compare the APR's, PB's do come out slightly less well off than the best-performing savings accounts, although the latest research I have read on APR's suggests that they are not the great comparison tool they are believed or supposed to be. (Another argument against PB's is that even if you win occasionally, inflation erodes the value of your original stake so that you effectively do end up with less than you originally put in. My counter to this is that we are currently in a very low-inflation environment, so this argument doesn't currently hold much water)
I can't think of a better way of investing some money than to stick it in a lottery where you can win up to £1m every month, and yet at the end of the day you can still walk away with all of your original stake (try going into your local newsagent and asking for all of the money back that you've spent on the National lottery over the last few years - you know what sort of an answer you'll get!!!) The How and What
You can buy premium bonds by walking into any Post Office and just picking up one of their forms. You just fill in your details, and send the form off with a cheque for the relevant amount. It really is as easy as that. This is one product provided by the government that actually is easy to use! You can buy bonds in multiples of £100, and the maximum investment limit has just been raised from £20k up to £30k (per person, not per household) Any money you win can either be paid out to you by cheque, or can be automatically set up to repurchase more bonds (up to the £30k limit).
Hope this Op has been of use, and if you decide to go out and get some, welcome to the world of premium bond holders... (One last point - the final massive plus point to PB's is that with the chance of winning every month, there is always the possibility that the postman is going to drop a cheque through your letterbox. It sure makes hearing the sound of all that mail arriving much more pleasant!!!!!)
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by (10%):
03.09.2003 09:54
well thought out opinion
27.08.2003 21:52
Sounds a great idea. I thought they were a thing of the past!
27.08.2003 14:16
Excellent op! I might well invest in some of these now that I've read what you have to say.