There is no interest generated on Premium Bonds. Rather, the interest rate is used to fund a monthly prize draw with tax-free prizes. Keep in mind that inflation might depreciate your money over time.
Is it possible to purchase Premium Bonds through my bank?
Every year, millions of Britons purchase Premium Bonds through the government-backed National Savings and Investments (NS&I).
Instead of paying interest, you’ll be entered into a monthly prize draw for a chance to win one of three tax-free rewards valued up to £1 million.
So, if you’re seeking for a regular income, this isn’t the account for you most people will only ever get a small percentage of what they contribute.
Premium Bonds are simple to obtain; all you have to do is apply on the NS&I website.
Alternatively, you can call 08085 007 007 or +44 1772 329880 to apply over the phone.
They can even be acquired for children under the age of 16, such as for a niece, nephew, or a friend’s child (more on this later).
Parents or guardians must be chosen to manage the child’s finances until they reach the age of 16.
For every £1 you invest in a Premium Bond, you’ll receive a unique bond number. They’ll be entered into the draw once you’ve had them for a month.
Have you already purchased some bonds? Check to see if you were a big winner in the most recent lottery.
I live outside the UK. Can I still buy Premium Bonds?
The first step is to determine whether you are permitted to hold Premium Bonds under local legislation. Premium Bonds may not be possible or practical to hold in the United States because to strict gaming and lottery legislation.
If you live in a country where they are legal, you must submit your initial application by mail. After you’ve set up your holding, you may sign up for NS&I’s online or phone service.
You can then manage your account online or over the phone (if you don’t mind the fees), which includes purchasing new bonds or cashing them in.
You also have the option of receiving rewards by BACS to a UK bank or building society account, or an NS&I Direct Saver or Investment Account (you’ll be advised of any changes via email), as well as receiving paperless papers.
Bonds can only be purchased with a personal debit card issued by a UK bank or building society online or over the phone. Prizes will be paid out in pound sterling wherever you are in the world.
Can I buy Premium Bonds for a child, even if they aren’t family?
Until the kid reaches the age of 16, the bonds are managed by the parent or guardian named on the application, regardless of who purchases them.
Until the child turns 16, the bond record, any prizes received, and payment for cashed in bonds will be forwarded to the selected individual.
Previously, only grandparents and great-grandparents were allowed to buy Premium Bonds for their grandchildren, but the regulations have been relaxed, and you can now buy them for any child, regardless of link.
Premium Bonds for youngsters can be purchased online at this NS&I gift website or by mail. You can also apply over the phone if you’re purchasing Premium Bonds for your own child.
If you want to apply by mail, go to this page, fill out the appropriate form, and mail it to:
What is the source of Premium Bonds?
Premium bonds can be purchased through NS&I online, over the phone, via bank transfer, or by mail.
If this is your first time investing, NS&I will verify your identification and address; you may be required to produce proof of both.
Each investment must be a minimum of £25 and can only be made in whole pounds.
The maximum investment is £50,000; any amounts greater than this will be disqualified from winning prizes. If these numbers are used in error to win prizes, NS&I reserves the right to retrieve the award.
Buying premium bonds for children
You can acquire bonds on behalf of minors under the age of 16 either online or over the phone if you’re a parent, legal guardian, grandparent, or great-grandparent.
The bond will be managed by the parent or guardian who was named on the application until the child reaches the age of 16.
When the child reaches the age of 16, NS&I will issue a letter outlining how to handle the bonds. They should print and mail a registration form, and their signature may need to be witnessed and mailed in as well.
They’ll get their own NS&I number and password once they’ve registered, and they’ll be able to manage the premium bonds that have been purchased for them.
If you live outside the UK
If you live outside of the United States, you can apply for premium bonds by mail and have your winnings deposited into an overseas bank account.
You’ll need to give proof of identity as well as your Social Security number. However, check local legislation first, as premium bonds are not permitted in every nation.
What is the most convenient way to purchase Premium Bonds?
What is the procedure for purchasing Premium Bonds?
- Purchasing anything on the internet. Premium Bonds can be purchased through our safe online system.
- Purchasing through mail. Simply fill out an application and mail it to us along with a check made payable to NS&I.
How do I purchase Premium Bonds over the mail?
Premium Bonds are held by an amazing 21 million people in the United Kingdom, making them by far the most popular way to save money in the country.
It’s easy to see why: in the May 2018 draw alone, 3,043,434 rewards were distributed, with two women walking away with cheques totaling £1 million.
National Savings & Investments (NS&I) pays out 1.4 percent of the entire amount saved in Premium Bonds every year, which is more than the current best-buy rapid access account’s 1.31 percent.
However, instead of being paid out as a norm, the winning bonds are chosen each month by an electronic random number generator known as ERNIE.
The chances aren’t great 24,000 to one but with a total investment of between £100 and £50,000, you can significantly reduce them. That’s because every £1 you put in gets you a distinct Bond number with an equal chance of winning in a monthly prize draw.
Furthermore, any awards you win are exempt from both income and capital gains taxes.
Is it possible to lose money on Premium Bonds?
No, because NS&I is a Treasury-approved and regulated company rather than a bank, your money is completely safe.
Even if you’re a bad luck client who never wins, the money you invest in Premium Bonds is protected. Although not always in terms of money’s true value.
Your money is dwindling in terms of what it can buy unless you win enough to stay up with the rate of inflation, which is currently 0.9 percent.
Do old Premium Bonds ever come out on top?
Is it still possible to use my old Premium Bonds? Yes. Your Bonds are still valid and will be included into our monthly prize draws as long as you haven’t cashed them in.
When do Premium Bonds enter the draw after purchase?
Premium Bonds are eligible for the draw one full calendar month after they are purchased, according to NS&I. If you buy them in November, for example, they’ll be in every draw starting in January.
What if my child receives Premium Bonds?
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.
Overview
Premium Bonds allow you to invest anywhere between £100 and £40,000. Each month, a draw is held, with Premium Bond holders winning roughly £100 million. A £1 million jackpot is the highest prize.
You are not required to report it on your tax return. Premium Bonds can be purchased by anybody over the age of 16, and you can also purchase them on behalf of your kid or grandchild.
How to use this service
To apply, download the PDF application form from the National Savings and Investment website and mail it back to them.
The following link will lead you to a page with an application form and links to more information about how the bonds work. A copy of Adobe Reader is required to access the form.
What is the procedure for adding funds to my Premium Bonds?
A bank transfer may be the best option for topping up your or your child’s funds on a regular basis. You can set up a standing order with your bank to top up more frequently.
You can usually accomplish this online, over the phone, or in a branch. There’s no need to provide your card information; we’ll update your account once the funds have been received. It normally takes two to three banking days for this to happen.
Premium Bonds, Income Bonds, Direct Saver, Direct ISA, Junior ISA, and Investment Account can all be topped up via bank transfer or standing order.