Is it Safe to Invest in Prize Bonds?
For anyone that has ever sought financial advice in Pakistan, chances are they’ve been informed to make investments into prize bonds. Prizes bonds are a unique method of investment that essentially works like lotteries backed by the government. Presented by National Savings under the State Bank of Pakistan (SBP), prizes bonds have been around for decades and are viewed as a very safe form of investment. Essentially, it does very much work like purchasing a lottery ticket, except you don’t lose money if you don’t win.
Prize Bonds are an interesting way to save and invest money in Pakistan. Often, entrepreneurs have used these prize bonds as a unique way to secure the funds they use to bring their ideas to life. Introduced by National Savings under the State Bank of Pakistan (SBP), Prize Bonds are usually seen as the safest way to secure revenue for your business’s future.
For any small investors in Pakistan whose funds are small but growing, there are opportunities for investment that may not be necessary on the radar of those interested in the stock market or other large-scale investments. For those wanting to earn more interest than what their savings account might be offering, National Savings Prize bonds are a potential option to explore.
Let’s say you deposit 500 rupees with a bank. In return, you’ll get a prize bond worth 500 rupees. Every three months of a prize bond, the government draws lots to see if any prize bonds win any money. If you happen to win, you can cash in the prize bond and collect your winnings. If you don’t win anything, you can either wait for the next draw or turn in your prize bond to the bank in exchange for the 500 rupees you paid for it since prize bonds haven’t been registered (some people use these as alternative currency).
It sounds like the easiest way to get rich, right? Well, it’s not. Almost all adults in Pakistan with a penchant for investing will have bought a lottery ticket at some point to try their luck. Still, the understanding of exactly what that apparition known as the Pakistani government is doing with the money they collect this way is incredibly limited unless you happen to work with financial instruments or spend all of your spare time learning about them.
It’s important to understand the value of money that one is saving. It can be especially helpful when deciding between an investment medium, such as purchasing a lottery ticket or investing in bonds or a mutual fund, for example. Prizes that are not won during any draw do not accrue interest, but the discount rate is lower than normal prize bonds.
The only way for investors to lose is if their ticket is not chosen. The primary targets of this scheme are those who have no fear of losing money when purchasing bonds and would rather take a chance to win at the lottery.
While it’s true that investors aren’t endowed with the opportunity to take any control over their funds until they win, no one can say that these bonds don’t have real power! These bonds account for a lot of the wealth in Pakistan, which is why they are an attractive substance to invest in.
For small investors who want to protect the value of their money while gaining more, prize bonds are a decent option. But are they as profitable as people think? More importantly, what are the chances that you’ll win the grand prize when it comes down to investing in government-issued prizes? Profit reveals everything you need to know about the purchase of prizes.
At times of financial uncertainty, many households are looking for ways to boost their funds. However, should they be considering investing in prize bonds? More specifically, are government prize bonds reliable assets? This article also explores the ins and outs of government issues.
Let’s begin with a few basics. The government makes sure the price of these bonds is set so that they accurately indicate how much money they collect through them. Each bond is different, and there is a range of prizes available. They can either be zero-coupon bonds or have coupons attached to them. But what all prize bonds hold in common is that if you happen to be one of the lucky winners, you only need to present your bond–and not the amount for which it was originally bought–to the government for payment.
The government issues bonds at different points in time that are marked with letters. Typically, the first series of bonds that a government has issued would be awarded the letter ‘A.’ The A series holds 999,999 prizes at any given time. The next release will have a new number, such as B-series or C-series, where new prize amounts will win. Generally, each series within a group will hold the same amount of money to give away. It means that under series C, there are still 999,999 prizes to give away, and they solely become available when the respective time frame has lapsed.
It is something of a lottery in the sense that you can win large cash prizes by matching the already announced numbers. However, the one way to do this is by purchasing a ticket in the first place – a ticket tied up with a series of letters and numbers. Just like a race track may be limited based on its capacity, each series is also limited not because of available spots on the racetrack itself. Still, perhaps there are only 999,999 tickets available for purchase! Once tickets have been exhausted, though, and all chances of winning prizes have been extinguished (or at least until they may potentially be made available again). Gameplay can continue as normal without those big cash prizes being an incentive. However, it will still operate much in the same way as before.
Conceptually, a bond is never really a waste on the other side of things. Because our wheels only draw from the back of those registered, there is always the chance that your number will eventually be pulled from the racks by probability. Now while it may take a few whiles or even years before this happens, you are guaranteed that it will because one way or another, we guarantee every prize listed on every bond within our collection!
We know how important and necessary it is to save for the future and an easy way to do so is through prize bonds. It means that if you keep your money in prize bonds, then theoretically, you will gain from interest over time. However, there could be periods when inflation means that you lose money, which may leave you disappointed because of how long you have waited for your number to come up!
Prize bonds are a type of investment. Like any investment, there are differences between prices. Some prizes are cheap, and some are expensive, called ‘premium’ prize bonds.
Bonds and investment vehicles in general sometimes make it difficult to generate a decent return on your money. It’s hard to know where you’re going to find the best deal. To better your odds of making a profit, we recommend investing in more than one bond series. By doing so, there’s more potential for you to emerge as a winner during each draw period.
Although the chances may be few, we suggest you invest in domestic prize bonds because you never know when you might hit the jackpot! While there are no definite signs that you will win a prize bond, we can help increase your chances by buying prize bonds in series.
Beware of fake prize bond racket in our country. You can’t win prize bonds by giving bribes to authority. The State bank of Pakistan and the Directorate of National saving center control a draw mechanism to ensure that this whole process is transparent and fair.
You can’t afford to buy a bond. Not only will you get all your money back if you don’t win, but the best part about it is that the amount of interest on bonds increases over time. It’s one of the safest ways to have your money grow quicker than what you would see with banks or other financial institutions. Prizes can be redeemed in any number at Prize Redemption Centers located at the bank branches and National Saving Cell offices from every region throughout Pakistan.
Prize Bonds are the gold standard in precious metal investments. They come in handfuls of smaller denominations that make for simple asset management. There’s no greater way to build a long-term investment portfolio and have it be simple to manage when you’re doing so with Prize bonds! Each series is different, but every series features more and bigger prizes. So if there are a Series 50 worth one crore rupees, then you can imagine we’re talking really big prizes! Better yet, all of your Prize Bond earnings are tax-free – while they continue to build and multiply without ever being taxed!