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Harold Macmillan introduced premium bonds back in 1956 and is defining as a government saving bonds that are pricing over and above the actual par value it possesses. National Savings & Investments reports suggest that at least 23 million people are premium bonds holders.
This is the issue by the British government’s National Savings & investments scheme that offers great ways of saving money in the long term as well as winning various tax-free prizes. Since these are issuing by the government, the investment is 100% safe and risk free. Callable bonds & nonmalleable bonds are two kinds of premium bonds that exist in the market.

When anyone makes purchases for premium bonds, it goes directly to the government’s funds. Instead of paying interest on these bonds, the government uses these funds and invests it in other funds for winning tax-free prizes for the general public. Premium bonds are holding only under the person that bought it, and are nontransferable. A big advantage of this bond is that it is ready cash; meaning it can be cashed at any time without any loss.
Every bond holder is allocating with a series of the number for every pound invested. The higher the price paid of these bonds, the better the chances of winning tax-free prizes. A draw gets generated every month, and the bondholder can win anything in the range of 50 pounds to 1 million pounds. The prize won from these bonds is the exempt from the UK Capital Gains and Income Taxes.
They can either be bought via telephone or by paying a visit to the nearest post office. One can even download the application from their website online. Minimum amount allow for investment is 100 pounds in denominations of 10 pounds of bonds. As a result, it is a safe and risky free method of winning prizes and incomes.