What are NS&I Premium Bonds?
Posted - 03/05/12
NS&I stands for National Savings and Investments: which describes
itself as the "Executive Agency of the Chancellor of the Exchequer"
of the United Kingdom. The NS&I claim they have investments
totaling more than £95 billion, from over 25 million investors/customers.
Of all it's savings products, the NS&I is best known for it's
premium bonds. Premium bonds do not offer an interest rate for the
money invested: instead the money is exchanged for premium bonds,
which are then entered into a monthly prize draw. The top prize
is £1 million; there are also other prizes - total value over
£1 million - ranging from twenty five pounds to one hundred
Each premium bond has a unique number, and each premium bond is
worth £1. You need to buy a minimum of 100 premium bonds,
and the maximum you can purchase is 30,000. The advantage to premium
bonds is that the prizes are tax free: which means they are not
subjected to either income tax or capital gains tax. The downside
is that they do not promise a regular income - ie, interest.