Back in the day, we were rewarded for running errands for our parents. But now, it just evolved to a whole new level. Premium bonds are a unique investment product. The concept behind premium bond is simple: instead of earning interest on your investment, you have the chance to win tax-free prizes every month.
How do Premium Bonds work?
Here’s how it works. When you purchase premium bonds, you are essentially buying entries into a monthly prize draw. Each bond has a unique number, and every month, the government uses a random number generator to select the winning bond numbers. The prizes range from ₹1k to ₹ 5 crores, and they are all tax-free.
Why are Premium Bonds an attractive investment?
Premium bond is an attractive investment option for many reasons. First and foremost, they offer the potential for significant winnings. While the odds of winning the top prize are relatively low (currently 1 in 43 billion), there are over ₹10crore worth of prizes awarded every month, so the chances of winning something are much higher.
Another benefit of premium bonds is that they are completely safe. Usually, government issues these bonds. They are backed by treasury and are considered to be one of the safest investments available. There is no risk of losing your investment, and you can cash in your bonds at any time without penalty.
In addition, premium bonds are very flexible. You can buy them in any amount between ₹1k to ₹40lakhs and you can add to your investment at any time. You can also cash in your bonds at any time, and the money will be available to you within 7 working days.
Will you get stable returns?
One important thing to keep in mind about the premium bond is that they do not offer a guaranteed return on your investment. A random number generator determines the winners. Matter of fact, you can go months or years without winning.
However, if you are looking for a safe and potentially lucrative investment option, the premium bond is definitely worth considering.
In conclusion, premium bonds are a unique and attractive investment option that offers the potential for tax-free winnings every month. While they do not offer a guaranteed return on your investment, they are backed by the UK government and are considered to be one of the safest investments available. If you are looking for a flexible and potentially lucrative investment option, premium bonds are definitely worth considering.
