The face amount of the bond is credited to your account after you win, and the SBP keeps the bond. You can get your bond back once you’ve received your gift and it’s been stamped. You can win a prize on the same bond if the bond number is drawn again.
How do you get your prize bonds money?
Answer: A claim for prize money declared on a winning prize bond can be made free of charge at any field office using the approved claim form. The completed form, along with a photocopy of the applicant’s NIC and a legally signed winning prize bond, may be submitted.
Is it a smart idea to buy prize bonds?
With historically low interest rates persisting, savers have struggled to earn a fair return on bank accounts for quite some time.
People have been looking for other potentially lucrative areas to invest their money, and one of the most popular options since the financial crisis has been the state-run Prize Bond business.
The National Treasury Management Agency manages Prize Bonds, which are part of the State savings plan (NTMA).
They can be acquired in 6.25 units, however each transaction must include at least four bonds, resulting in a minimum spend of 25.
Prize Bonds can be purchased online, by phone, by mail, and at any of the country’s 1,122 post offices.
Once you’ve purchased bonds, you’ll be placed into a weekly draw for prizes ranging from 50 to 50,000 (with two draws a year for a top reward of 1 million).
There are a number of clear advantages to investing in prize bonds rather than a savings account.
As a result, the interest you earn in relation to the amount you save will be extremely low.
Although prize bonds do not pay interest, there is the possibility of earning more money through weekly prize draws.
If you hit it big one week, or even if you just manage to win a few 50 or 500 prizes, your returns will be significantly greater than what a bank would provide you on the same investment.
However, prize bonds are no longer as attractive as they were in recent years, and a bondholder’s odds of winning have drastically decreased.
Despite the fact that Irish people are paying more on prize bonds than ever before, the prize fund is shrinking.
Last year, 567 million in prize bonds were issued, raising the total fund (the entire amount of money people have invested) to above 3 billion for the first time.
Despite this, with 302,000 awards given out last year, the number of prizes awarded fell by nearly 30%. In 2016, the same figure was above 392,000.
The prize money is also substantially lower: in 2016, 28 million was awarded, but last year it was just 21.3 million, a drop of roughly 7 million.
The ‘fund rate,’ in essence, is the percentage of the 3 billion+ in prize bonds that is awarded to holders in prizes, and while a 0.35 percent decline may not sound like much, it soon adds up when you’re talking billions!
When you consider that 2016 and 2017 were the two busiest years ever for prize bond sales, and the prize bond fund rate was as high as 1.25 percent as recently as 2016, this reduction is distressing.
The frequency of the 1 million award has also been significantly reduced. The 1 million was handed out on a monthly basis until June 2013, when it was cut to six payments per year.
The frequency of the 1 million prize award was lowered to four times a year starting in August 2016, and the National Treasury Management Agency stated last year that the 1 million prize will only be awarded twice a year, in June and December.
As a result of the lower rate, the number of weekly rewards has decreased from more than 7,000 in 2016 to just over 4,000 now.
The interest rate on the prize fund was “cut last year to reflect changes across the retail savings market and the fall in the State’s cost of borrowing,” according to the NTMA, which explained the reduction in the prize fund.
“As a result, the quantity of awards has decreased, but there are still a large number of rewards, with over 4,000 granted per week and over 70,000 awarded year to date.”
Bonds “retain their value because the initial investment can be paid at any moment and the money refunded to the customer,” according to the NTMA.
Are prize bonds a more appealing investment than a standard savings account based on this? With prize bonds, there’s a lot more room for profit.
If you win at least one of the minimum value prizes each year, your return will be comparable to the interest rate on a savings account, and if you win more, your return will be substantially higher.
The risk is minimal: you can’t lose any money, and all money invested in prize bonds is guaranteed by the government, with a maximum bond holding limit of 250,000 per individual.
You’d only be giving up the guaranteed 0.5 percent return on deposits, which isn’t much for most of us anyhow.
On a 1500 prize bond, how much tax do I have to pay?
National Savings – Withholding Tax on Prize Money For prizes won on or after July 1, 2016, the rate of withholding tax on prize money will be 20% in the case of non-filers and 15% in the case of filers.
What is the oldest prize bond that can be claimed?
A prize bond is valid till the end of the plan. What is the deadline for submitting a claim for a prize? The prize must be claimed within six years after the date of the draw.
How frequently are prize bond draws held?
The draw occurs once a week, generally on Friday. Prize Bonds are automatically placed into every draw, with thousands of dollars up for grabs each week. The last weekly draw in March, June, September, and December awards a 250,000 reward.
What is the price of a prize bond?
Prize Bonds are sold in 6.25 denominations. A 25 minimum purchase is required (4 units). Purchases can be made online or by filling out a Purchase Application Form, which is also accessible at any Post Office.
Are prize bonds still available?
Prize bonds have traditionally been popular among Irish savers because they are government-backed, tax-free, and offer the possibility to win significantly more than a deposit. Last year, prize bonds sold 574 million per year, bringing the gross fund’s size to a record high of 3.4 billion.
What is the value of an Irish Prize Bond?
The prize bonds draw, which began in 1957, is Ireland’s oldest prize draw. A prize bond costs 6.25 per unit, with a minimum purchase of four units for a total of 25. Every week, all qualified prize bonds are entered into a cash draw with over 3,000 awards. Every week, a draw is held with a top reward of 50,000.