What are Premium Bonds?
How Do Premium Bonds Function?
- What amount can a person invest in Premium Bonds? Every individual who wishes to invest in bonds must put at least £25 and not more than £50,000 in the NS&I savings.
- What quantity of Bonds can a person buy? The highest amount of Premium Bonds an individual may get is 50,000.
- How much do Bonds cost? You can buy a single bond in every £1 that you invest in NS&I savings product.
- Is it possible to invest in Bonds for children? An individual may buy bonds for himself/herself. Also, for their children, grandchildren or even the great-grandchildren.
- What is the legal age for purchasing bonds? The legal need for buying bonds for yourself is to be above the age of 16.
- When do bonds draw take place? Bonds draw for prizes occurs on the 1st of each month.
How can a person check if their bonds have won?
In every month, there are two winners of £1 million. While other investors win several more winnings of lower prices.
What is the most suitable time to purchase Premium Bonds?
There is not the right or wrong time to buy bonds. Yet, you should understand that you need to hold onto to your bonds until the end of the month. Before they become eligible to enter the monthly draw. For instance, if you buy bonds during working days in March. Afterwards, the bonds would get eligible to win the monthly draw prize from May onwards.
Premium bonds are best to various groups of persons such as those who:
- Are attracted with the opportunity of winning tax-free prizes once every month.
- Wish to invest in the bond until the child, the grandchild or great-grandchild becomes 16 years of age.
- Have extra money – a minimum of £25 – that the individuals wish to invest away from the regular savings accounts.
Premium bonds may not be best for individuals who:
- Are worried about the impact of inflation on their cash savings.
- Are searching for a constant source of income or prize fund interest rate.
- Are looking for guaranteed profit returns.
Are Premium Bonds Worth it in 2020?
It is hard to conclude and tell you whether the bonds market can be worth it in 2021.
Yet, if you ask an individual who recently won a prize of £100,000. Those who won the money within their first year after buying their first bonds. They stick to the position that bonds are worth it still in 2021. But, if you ask an individual who since started buying bonds never won any prize. And has invested about to £50,000 of their cash in bonds for over three years (with no interest). Then, such an individual will tell you that bonds are not worth it in 2020.
Additionally, the chance you have of winning the most rewarding prizes are minimal. Thus, you should not invest in bonds expecting to win and earn good money to become rich. It may happen; yet, it will never.
In case you hold your bonds for several years, and you do not win any significant prizes. It will imply that your returns may not overweigh inflation. Thus, indicating that you would at the end. Missing out on tremendous opportunities to grow your cash through other interest-earning savings.
Premium Bonds of NS&I Final Words
Despite all the disadvantages of buying bonds, they are safe and secure. thus implying that it is an honest means of investing and saving a part of your money. Yet, if you feel bonds are the right way for you, you might go for it. After all, anyone who has ever won the ultimate prize would tell your bonds are worth it in 2021.
So, in conclusion, the final decision if bonds are worth it in 2021 lies on you. Depending on your needs and expectations.
Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.
Risk Warning: Our products are traded on margin and carry a high level of risk and it is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved.