When a bond is selling above the original face value it is a premium bond and many investors will flock to it while the tide is riding high. Any individual investor can purchase these bonds at any time in just about an authorized place of government business. One of the most popular institutions is the post office. The potential investor will receive a holding number attached to the bonds. The holding number or numbers remain with the bond for the duration of the life of the bond.
The advantage of purchasing and holding the premium bond or bonds for investments is always with the anticipation of reaping the rewards of a higher interest yield which will make the difference between this type of bond and many of the other types of bonds. These premium bonds are cashable and transferrable at any time, but most of the original investors will hold on to them for a few years.
The major requirement is for these bonds to remain in the investor's possession without trading for a period of thirty days. Once the thirty-day requirement is satisfactory the investor can sell at any time of their choosing. An interesting point to keep in mind is the simple fact that there is no penalty fee once the initial thirty-days has come and gone.
Another very attractive feature is that at least for now the premium bond investment is safe from the capital gains tax. The county where the individual investor lives is common knowledge through the guise of the daily news, but the individual investors remains under protection. There are a number of reasons for the attractiveness of the premium bond and sometimes the lure becomes too great for anyone not to at least make the attempt.
The disadvantages of purchasing and owning the premium bond certificates are not in existence. Even when the certificate is lost, stolen, accidentally thrown out, or in any other way destroyed it continues to be a replaceable commodity. The premium bonds investment continues to hold more advantages and is a winning situation for any individual investor.
When the original investor decides to turn in, or cash the premium bond the process to follow is very simple. There is a very simple form that the investor must fill out and turn in to the proper authorities. The investor must enter all the pertinent banking information to help the process to perform smoothly. At this point it will take up to ten business days for the processing to go through. The individual investor will receive the cash value of the premium bond soon after.