THE LAST YEAR has seen a rush of cash put into Premium Bonds. Low interest rates elsewhere and the chance of winning £1 million has been enough to tempt millions of savers to take a punt.
So should you be joining them? Here’s what you need to know.
What are Premium Bonds?
Premium Bonds are issued by the government via National Savings & Investments, or NS&I. In return for investing your cash with them, each bond you buy (at £1 each) is put into a monthly prize draw.
You can save up to £50,000 in Premium Bonds, and the full sum is protected. It’s also an easy-access account so you can take your money out whenever you want, though it’s best to allow eight working days.
Any wins you get are tax-free, though in reality this won’t make much difference as the Personal Savings Allowance on interest earned means most people don’t actually pay tax on savings held elsewhere.
How much can you win?
Prizes start at £25 and go up to £1 million. If you do win, you’re most likely to get something at the lower end. And there’s a high chance you won’t win anything at all.
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