Why Is It Smart To Invest In Premium Bonds

Why is It Smart to Invest in Premium Bonds?

Most people invest their money in savings bond or the stock market. Premium bonds are a good way to invest your money and have fun at the same time. Most savings plans give you set interest rates overtime and unless you have a lot of money invested, it really doesn't make that much money for you. The meager interest on a money market account or a savings account will only give you a few cents and maybe dollars a month. Some of the investment plans will not even allow you to take the money out of the bank without losing the interest.

In stock market accounts you have the chance to make big money, but most of the time you will even out as the stocks drop and rise. A premium bond does not give you an interest rate, but they give you something better. A premium bond gives you the chance to win a monthly lottery that is well over a million dollars. The prize is not just for one person. There is actually two grand prizes and over a million and a half others. If you have $10,000 pounds invested, you have a 19% chance of winning some sort of cash prize. In other words, the chance or winning is 1 in 21,000. Not only is the possibility of winning exciting, it is more fun to look for a win than watch your money sit in a bank when you know what the final out come will be. The premium bond is like money in the bank and each bond has a unique number. Each bond costs one pound, and you have to have a minimum of one hundred pounds to make an order.

The premium bond is so popular in the United Kingdom, that over one third of the population has saved money in this fashion. Savings accounts and government bonds are stagnant. You agree to the interest upfront and that interest will not go up or down. No matter how much money the bank or the government makes on the bond, you will only get that percentage your agreed to. Even if the bank makes a twenty percent profit on your investment, you will only get the three to five percent you agreed on. If you need the money and take it out of the investment program, you will lose the interest that was promised you. You would have had the money invested for maybe years and you get back only what you put in.

With premium bonds you can get your money back anytime you want. Since you really didn't agree on a interest rate, you are not losing anything. The only thing you are missing out on is the chance of winning one of the prizes. Premium bond advocates are not promising you anything but a chance, a chance that has better odds and more chances to win then any lottery in existence. Even a small reward will out pay any interest on American bank accounts or government bonds.