Is June time to buy premium bonds?

Premium bond prizes range from £ 25 to £ 1 million, but the chance of winning can be very small compared to the savings rates offered today.

More than 24 million people in the UK themselves premium bonds, savings vehicles offered by national savings and investment supported by Treasury (NS & I).

The winner for June will be announced for the next few days, with two lucky bond holders in a million pound prizes.

But should you buy premium bonds, or are you better looking for a different place for your savings?

What is a premium bond?

The regular savings account pays up to seven percent at this time, although the tariff is likely to fall when the interest rate drops.

But unlike a savings account, premium bonds do not pay monthly tariffs. Conversely, holders are included in a monthly prize draw where they can win prizes between £ 25 and £ 1 million, tax -free.

They have a minimum investment of £ 25, and you can continue to buy it until you reach £ 50,000 – maximum detention rate.

Your money will not generate interest, but you will get a bond number for every £ 1 that you have invested, increasing your chance to win prizes the more money you invest.

However, you have to hold it for a full month so they are included in the lottery. You can withdraw your money whenever you want, without a penalty.

If you want to buy a premium bond, you can do it directly from the NS & I website or by calling them. If you want to sell it, you just cash it and immediately get money.

Every month the equipment indicator of the NS & I -I -Ernie Electronic Random Number for a short prize winner – randomly. The chance of winning is 22,000 to 1 for each bond of £ 1 in the lottery, and the annual prize fund rate is 3.80 percent. That’s for all premium bonds. There are no guaranteed gifts.

This is significantly lower than the highest payment savings account at this time. So why are they so popular?

Should you buy premium bonds?

NS & I is the property of the government and supported by the Ministry of Finance, making it a very safe place to place your savings-with its attractiveness. That means it will never be able to enter, risking your money.

If other institutions cannot return your money, you must claim it again through the financial services compensation scheme, which protects up to £ 85,000.

However, most of the savings accounts regulated by the UK are protected to this amount now, which means you have the potential to make more interest on more money if you choose one of them.

However, some people like the attractiveness of the lottery and aspects of safety, plus the fact that tax free victory.

Jun’s announcement is near. In May, two prizes of £ 1 million were given to winners in Derbyshire and Suffolk. 79 prizes of £ 100,000 were given.

If you buy it now, you have to wait until July to see if you win something, but you might be lucky.

However, it might not be a place to save all your money, given the vehicle rates such as ISAS and other savings accounts.

Automatically your savings with chip

If you prefer to not think about transferring money manually to premium bonds every month, you can use applications like chips. Chip is an automatic savings application that analyzes your expenditure patterns and “sweeping” any cash into the purpose of your choice of savings – including premium bonds.

Once arranged, the chip will collect your transactions (or count the small number of small) and automatically buy premium bonds on your behalf. That way, you keep your savings routine running in the background without having to enter NS & I every month.