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
References in periodicals archive ?
If your cash is paying nothing, at least with Premium Bonds you could win somethingDanny Cox
The total amount invested in Premium Bonds has increased from PS19.7bn in 2003 to more than PS53bn.
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.
The advertising slogan at the launch of Premium Bonds was "Saving with a thrill", as it offers an element of risk.
If our Premium Bond stake was safely invested in a building society account paying around 6%, it would gross nearly pounds 1,300 per year.
Whenever a regular National Savings mailshot falls through the letter box, I check our bank current account to see if any spare cash is earning a derisory 0.10%interest at Lloyds TSB and bung another pounds 200 off to the Premium Bonds HQ to get a centimetre or two nearer a pounds 1mmonthly jackpot.
A Premium Bond may appeal to those who like a the excitement of waiting to find out if they've won, but if you're a slow and steady saver, there are more reliable ways to grow your money.
ALMOST PS1.4 million in premium bonds prizes have gone unclaimed in the West Midlands it has been revealed.
You can check if you are a winner by entering your Premium Bond holder's number into the prize checker at www.nsandi.com.
National Savings and Investments is abandoning one of thepounds 1million jackpot prizes that Premium Bond holders can win.
TWO Premium Bond holders have each won pounds 1 million in February's double jackpot.
The lucky jackpot winners become Ernie's 205th and 206th Premium Bond millionaires.