Premium Bonds - About Premium Bonds & How They Work

Premium bonds are bonds you buy which cost £1 each and give you the chance to win a selection of prizes including the million pound prize. There are lots of other prizes each month in between the million pound prize and the million £50 prizes that you can win. Unlike the National lottery where you lose your capital when you do not win, with premium bonds you do not lose your capital and can cash them in at any time. Of course you do not get any interest on your money but you get the chances to win prize money instead. You have to be 16 to buy premium bonds although parents and grandparents can buy premium bonds for their children. There is no income or capital gains tax to pay on premium bonds, there are no charge to pay, the minimum you can buy is £100 and the maximum you can have is £30,000.

If you decide to cash in your premium bonds, you can usually get your money back within a couple of weeks.