Premium Bonds – We recently received an enquiry from an accountant:
Since short term deposits do not attract a great deal of interest and there is only security of capital on up to each £85,000 deposited with each bank – could we recommend anywhere to place short term cash?
One area that might be considered is investing in Premium Bonds.
The maximum that one can put in has been increased to £50,000 from 1st June 2015.
The attraction of premium bonds is they have the potential to win more in prizes than you might gain in interest, and that the prizes are tax free. This makes them a consideration for higher and additional rate tax payers.
“Your karma should be good, and everything else will follow. Your good karma will always win over your bad luck.” Rohit Shetty
They are not suitable if you are seeking regular income. In addition you have to be invested one month before you qualify for a prize draw.
Each month there are a number of small, medium and high value prizes allocated, plus two £1M prizes.