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5 Ways to Get the Best Deal on Premium Bonds

Tuesday, 08 Feb 2011 11:21 AM

A premium bond is one of the most secure investments for risk-averse investors, as they provide capital guarantee. Premium bonds do not give an interest payment, but interest payouts are converted into tax-free lottery prizes for bondholders every month. There are many ways to buy these bonds. A little effort on the investor's side can translate into an attractive deal on national premium bonds.
Here are five ways to get the best deal on premium bonds:
  1. One of the most time efficient ways to get a good deal on national premium bonds is through online purchase. A premium bond can be purchased directly at the website for National Savings And Investments, the British government department that has been selling premium bonds for over 50 years now. The department is backed by the HM Treasury and provides a guarantee for 100 percent security of the capital invested in the premium bonds. In order to get the best deal on these national premium bonds, you should remain updated on the NS&I website, as variables such as interest rate, prize value, and odds of winning might change from time to time.
  2. You can also purchase Premium Bonds by telephone, through mail, and over the counter at the post office. The online purchase of national premium bonds gives a good deal in terms of the investor being able to check the interest rates on a real-time basis. However, depending on the convenience for the buyer, a good deal on premium bonds can be found through offline avenues as well.
  3. The NS&I also offers a good deal on unclaimed premium bond prize money. There is no time limit for claiming the prizes and the bondholder can check online  for any unclaimed bonds at anytime, irrespective of the time having passed since the winning prize. The status can also be checked for unclaimed premium bonds purchased in the name of deceased relatives or for the self that were purchased by parents for a child.
  4. One should try and maximize the number of premium bonds that they purchase. The chances of winning the prize improve with the increase in the number of units held. To get an even better deal on premium bonds, the bondholder can use the prize money for buying additional bonds, thus increasing the number of bonds and improving the chances for winning in future draws.
  5. A premium bond becomes eligible for the draw after being held for a full calendar month. Therefore, purchasing a premium bond should be timed accordingly to become eligible for the draw at the earliest point in time. The buyer should keep in mind the number of days needed for clearance of payment as per the payment mode (debit cards, mailed checks, or over-the-counter purchases). Also, cashing in on a premium bond just before the draw date should be avoided in order to get a good deal.

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