premium bond


Also found in: Dictionary, Thesaurus, Legal, Wikipedia.

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 ?
In May, savers were dealt a blow when NS&I, which has a duty to balance various interests and bear in mind the wider market, slashed the Premium Bond prize pot as well as cutting some of its savings rates.
But with bonds, that's not how it works--instead, you get more in future interest payments from a premium bond than you do from a par bond.
NORTH savers are missing out on more than PS1m in premium bonds prizes, new figures show.
That's a bigger blow to Premium Bond holders than most have yet realised.
More than 300,000 people in Birmingham own Premium Bonds worth over pounds 200 million.
Savings related unit-linked endowments have stabilized, as risk averse customers have chosen regular premium products rather than risking a lump sum investment in a single premium bond.
Some 350 Premium Bond millionaires have been created since the bonds first went on sale in 1956.
NS&I said that these methods are already used by the majority of Premium Bond customers and the move reflects its commitment to operate as effectively as possible.
From your email, I suspect you're not a taxpayer, the fact Premium Bond prizes aren't taxed is irrelevant.
Across the West Midlands a total of 28,248 premium bond prizes are sitting unclaimed - worth PS1,396,725.