UK Premium Bonds - too good to be true?
2115 sats \ 7 comments \ @JoJo 14 Feb econ

An Overview
The UK Premium Bond scheme is a savings program operated by National Savings and Investments (NS&I), which is backed by the UK government. Instead of earning interest on savings deposits, holders of Premium Bonds are entered into a monthly prize draw, where they have the chance to win tax-free cash prizes ranging from £25 to £1 million. Each £1 bond is assigned a unique number, and all eligible bonds have an equal chance of winning in each draw. While there is no guarantee of winning, the appeal lies in the excitement of the prize draw and the potential for significant winnings without risking the initial investment.
A non-bitcoiner swears by this scheme and I can see why, it just doesn't sit right with me. I guess this is just another thing the fiat world produces. I've asked a few times how can there be no downsides to something like this, trying to get them to at least consider such promises from the fiat world, but it has no impact.
Would anyone know how something like this actually works on a deeper technical level, as I am greatly intrigued?
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5 sats \ 0 replies \ @0xIlmari 14 Feb
Bread and circuses.
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25 sats \ 0 replies \ @Enemy_of_the_state 14 Feb
They make more than make back the prize payouts by using deposits for 100x leverage on government bonds. What’s the problem? 🤡
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0 sats \ 0 replies \ @shado_op 15 Feb
They were launched in 1956, but remain popular because...
There is no capital risk. You are lending money to the UK gov. (The UK still has its own currency, so, like the US, will never actually default thanks to the money printer) You can get your money back whenever you want Prizes are tax free. This is very attractive to higher and additional rate taxpayers Odds of winning a prize are about 21,000 to 1; much higher than lotteries where you dont get your money back. Prizes vary. When interest rates collapsed, there was little point in being in a savings account for 0.01%, Premium Bonds became very popular!
Hope that makes sense...
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0 sats \ 0 replies \ @OriginalSize 14 Feb
Do they publish the odds?
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0 sats \ 1 reply \ @BitcoinIsTheFuture 14 Feb
Yes. Fiat Ponzi! Hard Pass!
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0 sats \ 0 replies \ @Kathleen_Croteau 14 Feb
Fiat shitcoins
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0 sats \ 0 replies \ @halleck 14 Feb
This reminds me of prize linked savings accounts. The idea is that saving and earning an interest rate is boring. (Especially so now, given that rates on savings accounts are so low.). But if you give a person the interest as variable "prizes" over time, they will basically be tricked or "nudged" into saving money.
I guess this is the same concept applied to bonds?
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