I suppose you are wondering what premium bonds and British period pieces have in common? I’m here to tell you.
I’m a sucker for period pieces (Mad Men is my fave) and British television (love me some Ricky Gervais in After Life). And when you mix the two together, it’s a multi-orgasmic experience.
My favorite British period pieces are, in no particular order because they are all excellent, are Call The Midwife, The Crown, and Downton Abbey.
I was determined to do some research on “premium bonds” after watching Call The Midwife Season X Episode X where Phyllis receives a letter that she won £5000 from a premium bond.
What is a Premium Bond?
A premium bond, which is a type of savings bond, is offered by the National Savings and Investments (NS&I) agency in the United Kingdom. These bonds are entered into a monthly prize draw with cash prizes that range from £25 up to the jackpot of £1 million.
All About Premium Bonds
In order to purchase premium bonds, you must be a resident of the United Kingdom, Channel Islands, or Isle of Man. The minimum investment is £25 and the maximum investment is £50,000. You can purchase premium bonds online, by post, or through select banks and building societies.
The interest rate on these bonds is currently 2.20% and is variable. The interest rate is used to calculate the prize fund, which is the pool of money that is used to award prizes each month.
How the Prize Draw Works
Each bond you own is entered into the monthly prize draw similar to a lottery. The more bonds you have, the greater your chances of winning a prize.
The odds of winning a prize are currently 24,000 to 1. If you win a prize, the money is paid directly into your bank account. If you win the jackpot of £1 million, you will receive a cheque.
What is nice about premium bonds is that they are low risk and there is the potential to win a large sum of money. Also, the interest rate is used to calculate the prize fund, which helps to ensure that there is always money available to award prizes each month.
If you are looking for an investment with potential, premium bonds may be worth considering. Just remember, the odds of winning a prize are 24,000 to 1, so don’t expect to become a millionaire overnight.
Benefits of Premium Bonds
- Low risk investment
- Tax-free saving
- The potential to win a large sum of money
- Great savings gift idea for children
Disadvantages of Premium Bonds
- The odds of winning a prize are 24,000 to 1
- You are not guaranteed any returns
- Will not supply a regular income
Premium Bond FAQs
Here are some frequently asked questions about premium bonds.
Q: When were premium bonds first introduced?
A: Premium bonds were first introduced in 1956.
Q: How much can I invest in premium bonds?
A: The minimum investment is £25 and the maximum investment is £50,000.
Q: What is the interest rate on premium bonds?
A: The interest rate at the time of this writing is currently 2.20% although you do not earn the interest. The interest rate is used to calculate the prize fund, which helps to ensure that there is always money available to award prizes each month.
Q: How are the prizes awarded?
A: Prizes are paid directly into your bank account. If you win the jackpot of £1 million, you will receive a cheque.
Q: Do you pay taxes on winnings?
No, you do not have to pay taxes on your winnings. All prizes are tax-free.
Q: What are the odds of winning a prize?
A: The odds of winning a prize are currently 24,000 to 1.
Q: What if I lose my premium bonds?
A: You can contact NS&I to replace lost, stolen, or damaged bonds. There is a £10 fee for this service.
Q: How can I check if I have won a prize?
A: You can check online, by phone, or by post.
Q: Can I check old premium bond numbers online?
A: Yes, you can check old numbers online. Simply go to the NS&I website and enter your Bond Number in the “Check your Premium Bond prizes” tool.
Q: How many premium bond prizes are there every month?
A: There are over 3 million prizes awarded each month, with the average prize being £50.
Q: What is the difference between a premium bond and a discount bond quizlet?
A: A premium bond is a type of savings bond that is entered into a monthly prize draw, while a discount bond is a bond that is sold at a price below its face value.
Q: What is the journal entry for recording the issue of a premium bond?
A: The journal entry for recording the issue of a premium bond would include a debit to the bonds payable account and a credit to the cash account.
Q: What are the journal entries for the redemption of premium bonds?
A: The journal entry for the redemption of a premium bond would include a debit to the cash account and a credit to the bonds payable account.
Q: How do I cash in my premium bonds?
A: You can in all or just a part of your bonds at any time online, via telephone or by post. Although you need to remember that inflation can reduce the true value of your money over time.
What is a Period Piece?
A period piece is a work of art, literature, music, film, or television that is set in a particular period of time. Usually, period pieces are set in times that are earlier than the present day. They often explore themes of history, love, and war. Period pieces often have lavish costumes and settings, and they can be either fictional or based on real events. Period pieces are often very popular with audiences, and they can be either serious or lighthearted in tone.
Examples of British period pieces include:
The above are all excellent examples of British period pieces that will transport you to another time and place. If you know and love others that I should watch, please drop me a line.
In conclusion, premium bonds are a type of savings bond offered by the National Savings and Investments agency in the United Kingdom that are entered into a monthly prize draw with the chance to win prizes up to £1 million. If you live in the UK and are looking for an investment with potential, premium bonds may be worth considering.