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Glossary · Savings

Premium Bonds

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Definition: An NS&I savings product where each £1 bond is entered into a monthly tax-free prize draw instead of paying interest. Maximum holding £50,000.

Prizes range from £25 to £1m. The annual prize fund rate is set by NS&I (variable). Capital is 100% safe (HM Treasury-backed) but returns are highly variable for small holdings.

Primary source: nsandi.com/products/premium-bonds

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