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Premium bonds is a savings product backed by the U.K. government that allows you to save and enter the chance to win prizes with up to £1 million instead of earning interest.
What you need to know
I recently found out about premium bonds whilst reading a money diary entry on Refinery29.co.uk. The diary entry said she put away £50k in premium bonds- this piqued my interest and I quickly visited NS&I to learn more.
How do Premium bonds work?
Premium bonds allows you to save monthly, it’s fully secure which means the risk of losing your money is very very low. Instead of paying monthly or annual interest to participants the equivalent interest amount is shared as prizes.
Each month a prize draw takes places and you can find out if you win. The odds are 24500 to 1- not a very high chance but the more you save, you more chances you get. In addition, whatever you win is tax free and your money can with withdrawn at anytime.
Can premium bonds grow my money?
If you are the person that has always wanted to gamble without the risk- this might be for you.
How to register for Premium bonds
How I plan to use Premium Bonds
Having assessed the pros and cons, I’ve decided to allocate a minimum of £25 a month into this savings product. This is a very, very low risk strategy and since I won’t be losing my principal (the money I put in monthly) I am happy to let it it be my - I hope I get LAS VEGAS lucky magic growth pot’.