Entry from British & World English dictionary
(also Premium Savings Bond)
Definition of Premium Bond in English:
(In the UK) a government security that offers no interest or capital gain but is entered in regular draws for cash prizes.
- Rather than paying interest, Premium Bonds offer savers the chance to win tax-free prizes ranging from £50 to £1m each month.
- In return for loaning the Government money, you are rewarded by receiving your interest tax-free (and in the case of Premium Bonds, by winning prizes).
- The current prize fund rate for Premium Bonds is 2.25%.
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