How To Buy Premium Bonds
Updated: Dec 14, 2022
There are other investment plans issued by National Savings and Investment (NS&I) where interest or a regular dividend income is earned. Premium bonds are entered in a monthly prize draw where an individual wins between £25 and £1 million tax-free.
Premium bonds can be likened to a savings account where you can put and take out money whenever you want. Also, the chances of improving your bonds improve the more you buy them.
Anyone who wants a guaranteed return on their capital or a regular income should not be advised on how to buy premium bonds. It's the same with anyone who chooses not to worry about the impact inflation has on their savings. Read along as we guide you on how to buy premium bonds.
Premium Bonds can be bought either on-line, or via the post, or in person at a local post office. You will need to provide some identification, and a means of payment for the number of premium bonds you decide to buy.
Buying a Premium Bond
There are several things you should know when you want to buy a premium bond which includes “how to buy a premium bond. However, anyone above the age of 16 who is ready to invest at least £25 can buy a premium bond. Also, there's a chance to win a tax-free monthly cash prize.
Several ways to buy a premium bond include:
1 Buying Online
Most people, when considering how to buy premium bonds, often focus on buying online. This is because buying online is usually considered the easiest way to buy premium bonds.
Buying premium bonds online can be done using a secure online system. Usually, if requested before 8 pm it will take two working days and three working days if requested after 8 pm to cash it. All you need to do is to have your card details ready.
2 Buying Over The Phone
As long as your credit card details are available, it is possible to buy premium bonds over the phone 24hrs in 7 days. It takes two days to cash out if a request is made before 8 pm and three days if it is made after 8 pm.
When you need to buy premium bonds over the phone, credit card payments will not be considered. If you want to know how to buy a premium bond for someone else’s child it is not acceptable.
3 Buying by Post
Another way to know how to buy premium bonds is by buying through the post. All you need to do here is to fill out an application form and send it with a payable check.
Requests made to cash out through posts will take two working days if requested before 1 pm and three working days if requested after 1 pm. The form includes details to buy either for yourself or your other child under years.
4 Bank Transfer or Standing order
You can also buy your premium bonds using bank transfer or standing order. However, anyone who needs to buy via bank needs to already have some premium bonds.
How do Premium Bonds Work?
The least amount of premium bonds you should buy for investing is £25. However, it is advisable to keep buying until you reach a maximum holding level of £50,000.
For every £1 you invest, you get a unique bond number with a chance to win a prize. This means that a person who invests £20 has got 20 bond numbers and so on.
You have a chance to win a cash prize in the monthly draw if you hold your bonds for a full month. You can discover how to buy premium bonds for yourself, your child, your grandchild, or your great-grandchildren. However, you must be at least 16 years old to purchase it yourself.
Requirements for Buying a Premium Bond
There are certain requirements you ought to have an idea about if you want to know how to buy premium bonds. These requirements include:
1. You need to have a minimum purchase amount of £25 for all your one-off and monthly standing orders.
2. The maximum amount you are permitted to hold at a particular time is £50,000.
3. There is an age limit for anyone who wants to buy and invest in premium bonds. This limit is 16 years. Anyone below 16 who wants to buy premium bonds will have to do that under the supervision of their parents or guardian.
However, such a person can also nominate any parent or guardian to hold the bonds at least for a full month before they are eligible to win.
If you have plans to move your money from other savings, you should do so within the last week of the month. If you do so, you can minimize the time of the money that is not earned.
Also, you could reinvest your prizes which will still be in the draw a month after you win. For example, if you win £25 worth of premium bonds and you decide to reinvest it. The extra £25 premium bond you earn will be in your next month's draw.
In your quest to discover how to buy premium bonds, you should know that saving with a lower amount increases your chances of winning. Yet, if you have more than £5,000 invested in premium bonds, you are more likely to win to close the prize rate.