Benefits of holding premium prize bonds

Benefits of holding premium prize bonds

Here are some of the benefits of holding premium prize bonds in Pakistan:

• Potential for high returns: The top prize for the Rs. 40,000 bond is a staggering Rs. 80 million, offering a chance at life-changing wealth. Even smaller prizes can provide a significant financial boost. Current profit rate
• Dual income stream: You earn a fixed profit every six months at a government-determined rate, providing a guaranteed return on your investment in addition to the chance of winning a prize.
• Safety and security: Unlike bearer bonds, premium prize bonds are registered in your name, minimizing the risk of loss or theft.
• Government backing: Since they are issued by the government of Pakistan, premium prize bonds offer a level of security compared to some private investment options.
• Zakat exemption: The profit earned on premium prize bonds is exempt from Zakat, a benefit for Muslim investors.
• Pledgeable: You can pledge these bonds to commercial banks to borrow a loan.
• Automated System: You don`t need to check draw results or visit the bank to claim your prize money or profit.
• Opportunity: Unlike the national prize bonds, due to any reason, if you miss any number in the check, you will lose the prize money. In premium prize bonds, you will not miss any prize you win in the eligible draws.

However, there are also some things to consider:

• Not guaranteed returns: Unlike fixed deposits, the profit rate for premium prize bonds is variable and can change. There’s also no guarantee of winning any prize money.
• Lower overall return compared to some investments: The combined return from profit and potential prize money might be lower than what you could earn from other investment options with higher risk profiles like stocks.
• Tax implications: Withholding tax applies to both the profit and any prize money you win.

Overall, premium prize bonds can be a good option for investors seeking a balance between the potential for high returns, some guaranteed income, and security. They are particularly suitable for those with a lower risk tolerance and looking for a chance to win big. However, it’s important to weigh the potential benefits against the limitations before making an investment decision.