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How Viable Are Premium Bonds

Do you think you should win at a least ait is a very safe investment because you
prize if you have invested 30,000 pounds inwon't lose your money. Unlike any other
premium bonds? There is no guarantee that youbonds, you can withdraw your money at any
will win a prize even in your lifetime. Buttime.
the report said that there are 168
millionaires from the winning the grand prizeThe negating factor is that you don't earn
since 1994. So, you may stand a chance toany interest from these bonds. But you have
win.an opportunity to become a millionaire. In
addition, you can use the same bonds for
Anyone can buy premium bonds. The onlyevery draw. If you compare to lottery, then
requirement is the person must be at least 16you understand that why so many British
years old. You can invest as little as 100people invest in these notes. In the lottery,
pounds  or  as  high  as  30,000  pounds.you have to buy all the time but for premium
bonds, you can buy one time and you are
Although the bonds don't give you anyentitled for a lifetime opportunity to win
interest, but the money which is pooled1,000,000 dollars of cash provided that you
together from all the investors provides adon't  redeem  them  for  cash.
sufficient fund for the cash prizes. You can
calculate the interest by taking the totalAnother factor that many people don't
cash money and divide it by the totalconsider is the inflation rate. Although you
investment. It will come to about 4% fordon't lose your investment, but the inflation
every  pound  invested.will depreciate the value of your investment.
What you have invested 10 years ago is not
How do the National Savings and Investmentgoing be the same worth should you decide to
agency determine who is the winner of theredeem the bonds today. You would not be able
cash prizes? Every month, they will drawto buy many things today if you could buy
random numbers using a number generator whichthem 10 years ago with the same amount of
is known as ERNIE. It will prevent any kindmoney.
of pattern. This will ensure that no one can
cheat the machine. Every bond will have aPremium bonds are safe investments. Today,
unique number. However, you need to rememberthe National Savings and Investment firm
one unique code. This unique code is issuedoffer an easier way to buy the bonds. You
to you as a bondholder when you buy youronly need to call them by phone. Apart from
first premium bonds. With this unique code,this, you can buy them from post offices,
it can trace to all your bonds that you haveATMS or directly from the agency. You only
bought.need to remember one thing. It is risk-free
and offers no interest. Nevertheless, it is
The good thing about this investment is thatnot inflation-proof. The value of your
the government guarantee it. You can say thatinvestment will depreciate over the time.



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