Uk Savings Bonds

Let us assume the conventional wisdom on government bonds is true and that the United States and United Kingdom both offer a wide array of government and corporate bonds that represent safer and more stable investments while offering several different approaches for the investor.

If that is a given, is there any real difference between the two government ran bond programs? Yes and while both the US and UK markets have at least an element of gambling, while at the same time the very purpose of bonds is reducing risks to an absolute minimum. But the UK market seems to make up for that missing excitement by offering the buyer in a monthly lottery instead of paying interest.

If gambling is your cup of tea Premium Bonds would provide for that by offering a chance to win a million pounds as well as many other cash prizes. And naturally, or more accurately, mathematically, the more Premium Bonds a buyer has in the bond pool the better their chance of winning one of the cash prizes.

Where other UK bonds offer a wide variety of different time periods and interest rates there is no time limit on Premium Bonds or interest paid. Instead the buyers simply remain in the monthly drawings hoping to hit the million pound jackpot or one of the other million dollars with of smaller cash prizes.

Of course for those who prefer the lower risks as well as high fixed rate of interest the UK's National Savings & Investments program offers a variety of savings bonds available that insure there is something that will meet the needs and desires of investors. For many investors these benefits and security outweigh the disadvantages of restrictions, penalties, lower interest rates and smaller returns.

But when it is remembered bonds almost always repay their par value, many are tax free investments, and returns are virtually assured when the bonds are held to maturity, those advantages counter the disadvantages for those who have both the time and patience to make long term, and secure investments.