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Premium bond
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bond premium, obligațiune premium
a type of savings bond issued by the government, in which the bondholder is entered into a monthly lottery drawing for the chance to win a tax-free cash prize, with the prize amounts ranging from small sums to much larger jackpots
What is a "premium bond"?
A premium bond is a type of investment offered by certain government institutions, where instead of earning regular interest, bondholders are entered into a prize draw for a chance to win tax-free prizes. In the United Kingdom, for example, Premium Bonds are issued by the government through National Savings and Investments (NS&I). People who buy these bonds do not receive interest payments, but each bond has a chance to win prizes, ranging from small amounts to large jackpots. The main appeal is the potential for winning prizes, though the money invested is fully refundable at any time without losing its value.
Example
I bought some premium bonds last month, hoping to win a big prize.
The only way to win with premium bonds is through the monthly prize draw.
If you ’re looking for an investment with no risk, premium bonds might be a good option.
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