Buying NS&I Premium Bonds for a youngster is a fantastic idea because it’s a gift that keeps on giving (possibly).
Premium Bonds can be purchased on behalf of a kid by anybody over the age of 16, thus aunts, uncles, and even family acquaintances can participate.
Furthermore, NS&I’s decision in 2019 to reduce the minimum investment amount from £100 to £25 makes them a considerably more practical, or inexpensive, gift.
Instead, how about purchasing bonds for yourself? The following are the simplest methods for purchasing Premium Bonds.
How to buy Premium Bonds for your child
Parents and legal guardians can apply online, over the phone, or by mail to purchase Premium Bonds as a gift for their children.
Whether you’re buying for the first time or adding to your collection of Premium Bonds, you’ll need to be registered with NS&I.
As previously stated, you must invest at least £25 in Premium Bonds, with each £1 producing one unique bond number.
Every number has an equal chance of winning a prize, so buying more increases your chances of winning.
Until your child turns 16, you will receive confirmation of transactions, money for bonds cashed in, and rewards won.
Do you want to know whether you’ve won anything? The most recent results can be seen in this article.
Buying Premium Bonds for someone else’s child
If you want to spoil your grandchild, niece, nephew, or even a family friend’s child, you can apply online or by mail for an electronic or paper gift card to give to the child.
Your investment will be acknowledged, but only the chosen parent or guardian will be able to manage and cash in the bonds.
Before purchasing Premium Bonds for someone else’s child, there are a few things to consider.
Of course, you’ll want to make sure the parent or guardian is okay with you sending over their information and that they’re happy to look after the bonds.
These facts include the child’s and parent’s or guardian’s dates of birth and addresses, as well as the child’s Premium Bonds holder’s number (if they have one).
Everyone on the application will have their identity and address checked by NS&I, therefore there’s a risk that documentation will be required.
To avoid any unpleasant shocks, inform the parent or guardian that NS&I may contact them to request documentation to establish their identity.
Premium Bonds are detailed in detail, including how to purchase them, how to cash them in, when winners are revealed, and more.
How long does the process take?
If you’re buying the bonds as a present for someone special, you’ll need to prepare ahead and apply ahead of time.
NS&I hopes to open new accounts in seven to ten working days, but because everyone’s name and address on the application form must be validated, it will most likely take longer.
What happens if the child wins?
If the child outperforms the odds and wins a prize, the parent or guardian will have to decide what to do with it.
There’s no need to be concerned about tax implications. While a child cannot earn more than £100 in interest per year from savings, this does not apply to Premium Bonds winnings because they are rewards.
Finally, make sure the child’s information is up to date: there are millions of pounds in unclaimed awards held by bondholders under the age of 16.
Is it possible to purchase premium bonds in my grandchild’s name?
Premium Bonds can be purchased by anyone who is 16 years old or older. On behalf of their kid or grandchild under the age of 16, parents, legal guardians, and (great) grandparents can invest.
No interest is paid on Premium Bonds. Instead, your Bonds will be entered into a monthly prize draw to win tax-free gifts.
Premium Bonds – the prize draw
Every month, almost two million awards are distributed to lucky Bond holders whose numbers are determined at random.
For every £1 you invest, you will receive a unique Bond number. Every month, each number has a separate and equal chance of winning a prize.
On the National Savings and Investment (NS&I) website, you may learn more, apply online, and check if you’ve won if you have Premium Bonds.
Can I purchase premium bonds on behalf of someone else?
To purchase them for yourself or someone else, you must be at least 16 years old.
If your child is under the age of 16, you can purchase Premium Bonds online, over the phone, or through the mail, or by transferring funds from another NS&I account in the child’s name.
How do I get my child a premium bond account?
Premium Bonds might be a unique gift for a child under the age of 16. Regardless of who purchased the Bonds, the parent or guardian specified on the application is responsible for them until the kid turns 16.
Until the child turns 16, we’ll email confirmation of any transactions performed, prizes earned, and payment for cashed-in Bonds to the selected parent or guardian.
Parents or legal guardians can submit an application online, over the phone, or by mail. If your child currently owns Premium Bonds and you want to purchase more online or over the phone, you must first register. While we set up your registration, this could take a few days.
You have the option of applying online or by mail. You may request that we send you an electronic or paper gift card to give to the youngster. We’ll also give you a confirmation of your purchase. The Bonds can only be managed and cashed in by the nominated parent or guardian.
- Please double-check that the parent/guardian is willing to take after the child’s investment and that you have their permission to give us their information.
- We’ll verify everyone on your application’s identity and address, and we may need to request documentation to prove it.
- Please inform the parent or guardian that we may contact them to request proof of identity documentation.
Is it possible for me to purchase premium bonds for my 21-year-old grandson?
To begin, let me state that Premium Bonds are a safe investment. They are government-backed and come from NS&I (previously National Savings & Investments). However, you should keep in mind that, after inflation is factored in, they will lose purchasing power from year to year.
There are a few things you should be aware of when it comes to Premium Bonds. To begin with, you can only purchase them for someone else if the receiver is under the age of 16; other family members must purchase them for themselves. They are available for purchase for any child, not only your own children or grandchildren. Premium Bonds for kids can be purchased online or by mail.
Adults can cash in their Premium Bonds whenever they wish, while bonds owned by children under the age of 16 can only be retrieved by the parent or guardian who has been designated.
How do you go about purchasing bonds for a child?
TreasuryDirect.gov makes it simple to purchase savings bonds online. They can be engraved with your name or the name of the child for whom they are being purchased. Prepare to submit the child’s entire name and Social Security number if the savings bond is to be given as a gift. The recipient must also have a TreasuryDirect account of their own. If you don’t have one, you can keep the gift in your account until you can set one up for them. Gift bonds are available in denominations ranging from $25 to $10,000.
Is it possible to purchase Premium Bonds for a grandchild who lives in another country?
It is feasible to buy premium bonds for grandchildren in other countries, but you should check to see if it is permissible to do so in their home country, as some nations have strong gaming and lottery rules. Although there are no guaranteed returns with premium bonds, they are tax-free in the United Kingdom and you could win rewards.
Is it possible to purchase Premium Bonds under a joint name?
Some assets (such as a joint bank account) can be owned jointly with another individual, allowing the assets to flow to the survivor owner after the other owner dies. Outside of the estate, other assets can be designated to a beneficiary (such as life insurance). The assets in these cases can be administered without the need for a probate grant.
Premium bonds can’t be held in a joint account with someone else. Furthermore, premium bonds cannot be designated to pass to a beneficiary when the owner passes away. If the entire worth of NS&I items exceeds £5,000, you have no choice but to file for a grant of probate.
Is it possible to cash in my child’s Premium Bonds?
Not a member yet? You don’t need to create an online profile to withdraw money from your or your child’s Premium Bonds. All you have to do is complete a little online form. Make sure you have access to your account information.
Please note that in order to withdraw or close the account, you must be the person responsible for the child’s Premium Bonds.
You can withdraw money from Premium Bonds while ensuring that particular Bonds remain in the draw by filling out a form online.
A cashing in form can also be downloaded, printed, and completed. Then send us your completed form along with the Bond certificates that need to be cashed in (if you have them).
The everyday option: a children’s saving account
Consider a children’s savings account if you want to give your grandchild a gift that won’t break or get uninteresting.
Some children’s accounts pay a significantly greater rate of interest than regular accounts.
Getting your grandchildren to open a savings account at a local bank or building society is a fantastic approach to start teaching them about money.
You might tell your grandchild that if they save money instead of spending it all at once, they would have a larger sum to spend on bigger purchases. Also, emphasize that their money is creating money when they receive interest.
It’s simple to save for grandchildren as a grandparent. If you present sufficient proof of identity, such as a birth certificate, you can create a savings account for them.
- If the money comes from a grandmother, the interest on the child’s account will not be taxed, unlike money donated by a parent, which will be taxed as if it were earned by the parent.
What is the best savings account for a grandchild?
The best rates are usually found in regular savings accounts. However, in order to get the interest rate, you’ll likely have to pay a certain amount each month. We’ve compiled a list of the best-paying regular savings accounts.
You might open a fixed-rate savings bond, which pays a high rate of interest. The money is, however, locked up for a specified period of time, usually between one and five years.
Here you’ll find the greatest fixed-rate bonds. We also provide a list of the top savings accounts for kids.
Learn about Mia’s grandmother, who was able to pay £50,000 in school tuition after selling her property.
The investment option: junior ISAs
If you’re thinking ahead and want to aid your grandchildren when they’re older, get a junior ISA.
A junior ISA for a kid under the age of 16 can only be opened by parents or guardians with parental responsibility. However, anyone can add to the accounts up to the annual limit of £9,000. (2021-22 allowance)
- Junior ISA for stocks and shares: the money is also tax-free, but you can invest it in the stock market.
Cash may appear to be a safe bet, but with interest rates as low as they are, investing for as long as 18 years has a better chance of defeating inflation.
- Let’s say you deposited £500 into a junior stocks and shares ISA shortly after your granddaughter was born.
- Your grandchild’s pot might be worth roughly £14,350 when he or she turns 18. This assumes a 5% annual investment growth rate, minus 1% charges.
Because only the child can take the money out after they turn 18, using a junior ISA ensures that the money gets to your grandchild.
WARNING: They may spend the entire lump sum on fast vehicles and wild parties, but you still have time to impart financial advice.
If they do not spend it, the account will be moved to an adult ISA.