Are premium bonds worth it?
If you have become an avid reader of the Winzum blog you will know that we’re always looking to help our wonderful online competition community, and with us it’s never just about offering sensational online competition prizes (although it’s definitely our forte).
We’ve explored many things from across the worlds of online security, interesting quiz facts and attention-grabbing history – hopefully it’s helped you in some way! This time we’re going to be looking at the world of premium bonds, and asking: are premium bonds worth it? There are several positives and negatives, so keep reading to find out.
A basic overview of premium bonds
Premium bonds were launched by National Savings & Investment all the way back in 1956, and as a result they are often referred to as NS&I premium bonds too. Buying premium bonds is essentially comparable to a form investing, however instead of receiving interest you are instead entered into a monthly lottery draw.
For each £1 invested, premium bond buyers will receive a unique code, and this will then be entered into a draw each month. In many ways, therefore, buying premium bonds is a bit of a lottery, but without nearly as much risk. There is more on the premium bond basics here [what are premium bonds?].
How to buy premium bonds
Now, if you want to buy premium bonds the process really could not be any easier, all you have to do is head to the NS&I website. And if that is too much trouble you can also buy premium bonds over the phone, or even through the post.
The ease of buying premium bonds in the 21st century is enough to make people disregard if premium bonds are worth it – why not invest, eh? Well, if you keep reading we will explore whether or not premium bonds are worth it.
Cases where premium bonds really are worth it
Obviously, if you are ever lucky enough to win the maximum £1 million monthly jackpot then premium bonds will definitely be worth the money, however the odds of this happening are rather small indeed. There are smaller premium bond prizes that go down as little as £25, but even then the odds of winning anything are 34,500 to 1.
But here’s the thing: depending on how often you buy premium bonds and in which quantity you could have numerous chances to win something. Are premium bonds worth it? As soon as you win something from them there is no doubt that they are! Examples of where premium bonds can go wrong
One reason why NS&I premium bonds are so popular is that they do offer a fairly large degree of protection over your savings, mainly because it is a government-led project. For this reason buying premium bonds can never go completely wrong, even if you never win a single prize.
With that being said, however, it isn’t a good idea to keep your entire savings in premium bonds, because its value will decrease over time due to the lack of interest.