premium bond

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Premium bond

A bond that is selling for more than its par value.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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’).
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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’).
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005