Premium bonds are one of the traditional ways of saving money and can even result in a big bonus if you win a prize in the regular draws. But how do you buy them and Are They Worth It when compared to other ways to save money?
How to buy premium bonds
It is a simple enough process to buy premium bonds which are offered by the government under their NS&I department – National Savings & Investments. Firstly, you can visit the main website and buy them using the secure online system. This is the quickest way to buy premium bonds.
You can also call the NS&I team to buy over the phone. The line is open 365 days a year, 24 hours a day. You will need your bank card details with you when you call to make the payment for the premium bonds.
Finally, you can still send for them by post with a cheque. You will need to complete the application form and send it with your payment to the main address. There are two different forms to use – one if you are buying for your child who is aged under 16 and the other if you are buying for your grandchild or great-grandchild who is aged under 16. In both cases, you need to buy at least £25 worth of premium bonds.
Finally, you can pay with bank transfer or standing order if you are buying them for a child who already has premium bonds in their name. Each investment needs to be for at least £25.
Managing your bonds
One of the big attractions to premium bonds is the chance to win a big prize in the regular prize draws. In order to know if you have won, you need to be able to check your bonds and the best way to do this is by registering for an online account. Once you have set up an online account, you can visit the website, check your balance and see if you have won any prizes.
You can opt to buy bonds through the post and receive a written confirmation every time you buy or cash on bonds. There are also paperless options for this. In every case, you will need the holder’s number which connects all the premium bonds you own and is different from your NS&I number which is provided for online or phone access.
Are they worth it?
If you are trying to decide between premium bonds and other ways to save, there are a few points to consider. There is a chance of £1 million jackpot which is drawn every month as well as a number of other cash prizes which isn’t something that other savings options offer. If you want 100% security and to make the most of tax-free investment opportunities, they are ideal.
On the turn side, if you are worried about inflation eroding savings or want a regular income, then premium bonds may not be ideal. Also if you want guaranteed returns, they may not be the right option.