Encyclopedia > Premium Bond

  Article Content

Premium Bond

A premium bond is a bond issued by the United Kingdom government's National Savings & Investments scheme. The government promises to buy back the bond on request for its original price. The government pays interest on the bond, but instead of the interest being paid into individual accounts, it is paid into a prize fund, whereby a monthly lottery distributes tax-free prizes or premiums to selected bond holders whose number has come up. The machine that generates random numbers for the lottery is called ERNIE, for Electronic Random Number Indicator Equipment. There are many different prizes ranging from £50 to the top prize of £1,000,000. Around 23 million people own Premium bonds, about one third of the UK's population.

ERNIE is a hardware random number generator.

Each person may own up to £30,000 in Premium Bonds. Bonds are currently sold in multiples of £100.

External links



All Wikipedia text is available under the terms of the GNU Free Documentation License

 
  Search Encyclopedia

Search over one million articles, find something about almost anything!
 
 
  
  Featured Article
David McReynolds

... in Political Science. Between 1957 and 1960, he was on the editorial board of the Leftist magazine, Liberation. He was a staunch pacifist and draft resister, and in 1960 ...

 
 
 
This page was created in 25.7 ms