Premium Bonds (NS&I)

National Savings and Investments, or NS&I, is a savings and investment service backed by Her Majesty's Treasury. They offer a range of investment options, including savings certificates and Premium Bonds. Premium Bonds in the UK are a form of lottery savings. Instead of earning interest, every pound that you invest is allocated a number and these numbers are entered into a prize draw each month. Your numbers have the chance to win cash prizes ranging from fifty pounds to one million pounds. You can invest a minimum of one hundred pounds in Premium Bonds, and a maximum of thirty thousand pounds.

Your capital is guaranteed: if you invest one thousand pounds you will be entitled to one thousand pounds back, if you choose to cash in your bonds. There are however no guaranteed returns: you may win a million pounds in the first year of investment, or never win in five years. Your capital is also not increased in line with inflation, and so the buying power of your investment may be reduced over time. Nevertheless, Premium Bonds are a fun way of saving, giving you the chance to make huge investment returns without any risk to your capital. Any prizes that you win are tax-free.

To invest in Premium Bonds, contact National Savings and Investments on 0845 964 5000, or visit their website nsandi.com to purchase bonds online.