premium bond

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Premium bond

A bond that is selling for more than its par value.

Premium Bond

A bond with a price higher than its face value. A premium bond occurs when a particular bond's coupon rates exceed the interest rates prevailing at the time. For example, if a bond was issued with a 5% coupon and most other bonds are paying 2%, this bond has more value on both the primary and secondary markets. As a result, it is more expensive and is sold at a premium.

premium bond

A bond that sells at a price above its par value. An investor must be careful about purchasing a bond that is selling at a premium because of the possibility of a call by the bond's issuer for sinking fund requirements or for refunding. Except for convertible bonds, the size of a bond's premium usually can be expected to decline as the bond approaches maturity, at which time it will be paid off at par.

premium bond

a FINANCIAL SECURITY issued by the UK government as a means of raising money for the government and encouraging private SAVING. Premium bonds are issued in small denominations, but do not pay interest, nor can a capital gain be obtained on redemption, since they are issued and redeemed at their face value. Their appeal lies in the prospect of a ‘gambler's chance' of winning a substantial lump sum of money in a monthly prize lottery (numbers being drawn electronically by ‘ERNIE’).

premium bond

a FINANCIAL SECURITY issued by the UK government as a means of raising money for the government and encouraging private SAVING. Premium bonds are issued in small denominations but do not pay interest, nor can a capital gain be obtained on redemption since they are issued and redeemed at their face value. Their appeal lies in the prospect of a ‘gambler's chance’ of winning a substantial lump sum of money in a monthly prize lottery (numbers being drawn electronically by ‘ERNIE’).
References in periodicals archive ?
From July 31, NS&I's contract with the Post Office for Premium Bond sales ends and all NS&I business will be direct - via 24 hour call centres, online through nsandi.
The change follows an announcement in the 2014 Budget that National Savings and Investments (NS&I) would increase the Premium Bonds investment limit.
We had PS20,000 from downsizing and decided to try our luck in Premium Bonds.
Premium Bonds were introduced in 1956 by the then Chancellor and later Prime Minister Harold MacMillan.
Last month Premium Bonds paid out PS51MILLION spread among 1.
The last time the limit on how much can be invested in Premium Bonds went up was in 2003, from PS20,000 to PS30,000.
Premium bonds draws are run by National Savings and Investments (NS&I) and prizes are considered 'unclaimed' when the winner does not come forward within 18 months.
The information comes from National Savings and Investments (NS&I), who run the premium bonds draw.
Sadly, Premium Bonds do not hold such attractive opportunities to win that they once did and without winnings, money held in Premium Bonds devalues in real terms because of inflation.
Jill Waters, National Savings and Investments' operations manager, said: "It is likely the winner of the PS100,000 prize is unaware or has forgotten that she has Premium Bonds.
In Teesside, there are almost 170,000 Premium Bond holdings worth more than pounds 220m and there are over 3,000 prizes worth over pounds 190,000 that still remain unclaimed.
com said that, following recent changes to the Premium Bond prize fund, people with pounds 1,000 invested over two years had only a one-in- 20 chance of getting better returns than they would from a leading savings account.