Premium Bond (Paperback)

High Quality Content by WIKIPEDIA articles! A Premium Bond is a lottery bond issued by the United Kingdom government's National Savings and Investments scheme. The government promises to buy back the bond, on request, for its original price. They were introduced by Harold Macmillan in his 1956 budget. The first winner was Ronnie Butters, a railway shunter working at Halifax; he was later to advertise Premium Bonds on television. The government pays interest on the bond (pegged at 1% in June 2009). But instead of the interest being paid into individual accounts, it is paid into a prize fund from which a monthly lottery distributes tax-free prizes, or premiums, to those bond-holders whose numbers are selected randomly. The machine that generates random numbers for the lottery is called ERNIE, for Electronic Random Number Indicator Equipment.