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How Viable Are Premium Bonds

Do you think you should win at a least amoney. Unlike any other bonds, you can
prize if you have invested 30,000 poundswithdraw your money at any time.
in premium bonds? There is no guaranteeThe negating factor is that you don't
that you will win a prize even in yourearn any interest from these bonds. But
lifetime. But the report said that thereyou have an opportunity to become a
are 168 millionaires from the winningmillionaire. In addition, you can use
the grand prize since 1994. So, you maythe same bonds for every draw. If you
stand a chance to win.compare to lottery, then you understand
Anyone can buy premium bonds. The onlythat why so many British people invest
requirement is the person must be atin these notes. In the lottery, you have
least 16 years old. You can invest asto buy all the time but for premium
little as 100 pounds or as high asbonds, you can buy one time and you are
30,000 pounds.entitled for a lifetime opportunity to
Although the bonds don't give you anywin 1,000,000 dollars of cash provided
interest, but the money which is pooledthat you don't redeem them for cash.
together from all the investors providesAnother factor that many people don't
a sufficient fund for the cash prizes.consider is the inflation rate. Although
You can calculate the interest by takingyou don't lose your investment, but the
the total cash money and divide it byinflation will depreciate the value of
the total investment. It will come toyour investment. What you have invested
about 4% for every pound invested.10 years ago is not going be the same
How do the National Savings andworth should you decide to redeem the
Investment agency determine who is thebonds today. You would not be able to
winner of the cash prizes? Every month,buy many things today if you could buy
they will draw random numbers using athem 10 years ago with the same amount
number generator which is known asof money.
ERNIE. It will prevent any kind ofPremium bonds are safe investments.
pattern. This will ensure that no oneToday, the National Savings and
can cheat the machine. Every bond willInvestment firm offer an easier way to
have a unique number. However, you needbuy the bonds. You only need to call
to remember one unique code. This uniquethem by phone. Apart from this, you can
code is issued to you as a bondholderbuy them from post offices, ATMS or
when you buy your first premium bonds.directly from the agency. You only need
With this unique code, it can trace toto remember one thing. It is risk-free
all your bonds that you have bought.and offers no interest. Nevertheless, it
The good thing about this investment isis not inflation-proof. The value of
that the government guarantee it. Youyour investment will depreciate over the
can say that it is a very safetime.
investment because you won't lose your



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