How to Buy Premium Bonds
Decide if NS&I Premium Bonds are right for you., Have your starting investment ready., Apply online., Apply by phone., Apply at a Post Office., Apply by mail., Purchase more bonds as needed., Know the limits.
Step-by-Step Guide
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Step 1: Decide if NS&I Premium Bonds are right for you.
NS&I Premium Bonds are a savings account you can put money into and redeem at any time without penalty.
Note that you cannot get withdraw your investment instantly like a bank account or ISA.With these bonds, the interest you earn is based on a lottery system.
Your bond number is put in a system that randomly draws a certain number of bonds per month one calendar month after purchase and will continue to be entered until you cash in your bonds.Those bond numbers are paid various amounts, up to 1 million pounds.
You are not guaranteed to win anything in a given month.
All of the interest that is paid is tax free in the United Kingdom.,One benefit to Premium Bonds is that your initial investment is very safe.
The NS&I is backed by the Treasury.
The maximum you can put into Premium bonds is 50,000 pounds, and this entire sum would be guaranteed by the government.
While there is a chance of winning a very large sum, the odds of winning 1 million pounds is 1 in 27 billion per each 1 pound bond.
Your odds of winning 25 pounds is 1 in 26 thousand per each 1 pound bond.So, most people will not win enough to match the current interest rate.
On average, you can expect to win what the current established interest rate is (currently
1.35%).
Therefore, it is only worthwhile if you cannot get more from a high interest savings account, or if you are willing to risk a lower return for a small chance of a much higher return. -
Step 2: Have your starting investment ready.
You need at least 100 pounds to start your investment in NS&I Premium Bonds,though you can begin with 50 pounds if you commit to a purchase per month.
Each bond is 1 pound., You will need to fill in basic information, such as your name, your phone number, and your address.
You'll also need you debit card information.
Make sure it is one from a UK Bank.
If you've registered online or by the phone, you'll need your NS&I identification number and your password, as well as your holder number.You can apply online at www.nsandi.com.
Fill out the form.
You'll need to answer questions such as how you want your notifications sent to you, as well as whether you want your awards cashed or reinvested as bonds., You can also apply by phone.
You'll still need to have all of the same information on hand to give to the representative.Call 0500 500 000 to buy bonds., You can fill out an application at the Post Office and pay for bonds on the spot.
You will make out the check to Post Office Ltd., You can send in a check by mail along with your application for NS&I Premium Bonds.
The application is available online.
Make the check payable to National Savings and Investments,and send it with the application to NS&I, Glasgow, G58 1SB., Each time you buy bonds, you must meet the minimum investment of 100 pounds or 50 pounds with a per-month purchase.
You can purchase more bonds in your name the same way you purchase your initial bonds or by one of the other methods laid out in this article., As of 2015, you can only hold a total of 50,000 pounds in NS&I Premium Bonds. -
Step 3: Apply online.
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Step 4: Apply by phone.
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Step 5: Apply at a Post Office.
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Step 6: Apply by mail.
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Step 7: Purchase more bonds as needed.
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Step 8: Know the limits.
Detailed Guide
NS&I Premium Bonds are a savings account you can put money into and redeem at any time without penalty.
Note that you cannot get withdraw your investment instantly like a bank account or ISA.With these bonds, the interest you earn is based on a lottery system.
Your bond number is put in a system that randomly draws a certain number of bonds per month one calendar month after purchase and will continue to be entered until you cash in your bonds.Those bond numbers are paid various amounts, up to 1 million pounds.
You are not guaranteed to win anything in a given month.
All of the interest that is paid is tax free in the United Kingdom.,One benefit to Premium Bonds is that your initial investment is very safe.
The NS&I is backed by the Treasury.
The maximum you can put into Premium bonds is 50,000 pounds, and this entire sum would be guaranteed by the government.
While there is a chance of winning a very large sum, the odds of winning 1 million pounds is 1 in 27 billion per each 1 pound bond.
Your odds of winning 25 pounds is 1 in 26 thousand per each 1 pound bond.So, most people will not win enough to match the current interest rate.
On average, you can expect to win what the current established interest rate is (currently
1.35%).
Therefore, it is only worthwhile if you cannot get more from a high interest savings account, or if you are willing to risk a lower return for a small chance of a much higher return.
You need at least 100 pounds to start your investment in NS&I Premium Bonds,though you can begin with 50 pounds if you commit to a purchase per month.
Each bond is 1 pound., You will need to fill in basic information, such as your name, your phone number, and your address.
You'll also need you debit card information.
Make sure it is one from a UK Bank.
If you've registered online or by the phone, you'll need your NS&I identification number and your password, as well as your holder number.You can apply online at www.nsandi.com.
Fill out the form.
You'll need to answer questions such as how you want your notifications sent to you, as well as whether you want your awards cashed or reinvested as bonds., You can also apply by phone.
You'll still need to have all of the same information on hand to give to the representative.Call 0500 500 000 to buy bonds., You can fill out an application at the Post Office and pay for bonds on the spot.
You will make out the check to Post Office Ltd., You can send in a check by mail along with your application for NS&I Premium Bonds.
The application is available online.
Make the check payable to National Savings and Investments,and send it with the application to NS&I, Glasgow, G58 1SB., Each time you buy bonds, you must meet the minimum investment of 100 pounds or 50 pounds with a per-month purchase.
You can purchase more bonds in your name the same way you purchase your initial bonds or by one of the other methods laid out in this article., As of 2015, you can only hold a total of 50,000 pounds in NS&I Premium Bonds.
About the Author
Gloria Kennedy
Experienced content creator specializing in lifestyle guides and tutorials.
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