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Premium bond theorys and facts

By: Red Bets

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Premium bonds marked their fiftieth anniversary in November 2006. They have been the most popular form of investment in British history. Premium bonds are bought and kept by over 40% of Great Britain's populations. Where traditional investments yield a small return over time, premium bonds yield no return at all but give the investor a chance to win a monthly lottery. This popular investment strategy have made millionaires out many British citizens and at the same time provided the investors that didn't win a secure place to save their money and help out the national treasury. They have the option of pulling out the money at any time without loss. Here are some bizarre facts that surround these popular bonds.

From its conception until the late eighties there was even a beauty contest to celebrate the premium bonds program. The National Saving and Investment agency, the department in charge of the bond program, held an annual Miss Premium Bond competition in which employees of the agency entered during the annual Civil Service Sports and Social Club Day held in Lytham St. Annes. Just like regular beauty pageants, the competitors would walk down the catwalk flaunting their looks and style. They would smile politely to the judges and then answer questions related to the pageant. No other investment company has ever sponsored such an event.

Similar to the American lottery there has been some weird stats derived from the program. Similarities from the statistics include that Hannah is the most frequent name that has won a premium bonds lottery and Sean was the most frequent male name. The ten top readers were all female except for one. Some winners don't even claim their prizes. There is an unclaimed prize for twenty five thousand pounds waiting patiently for the owner to claim. There are also more than five hundred thousand pounds stored at the agency just waiting for somebody to come and take it home.

There are even conspiracy theories that call the premium bonds program a scam. There are people who will cash in their bonds and then buy new them so that they will have modern numbers. The first bond ever bought is still in the system, but these people believe that only new numbers will be generated from ERNIE the famous number generating machine.

Other conspiracy theorists have come up with ideas that the machine is prejudiced to what region of Great Britain the winners will be chose from. One man in Wales even has said that the bonds were rigged because Wales had the fewest amount of winners. What he failed to realize was that fewer people in Wales bought premium bonds and that naturally the statistics would favor a larger buying population.

As there is winners there are also losers. You can't really loose because the bonds are cashed in at the same amount they were bought at. One gentleman reported that he had never won in twenty years. He states he has even stopped looking at the monthly numbers. He could be one of the people who has never claimed the over five hundred thousand pounds that have never claimed.

As with most things that are concerned with the government, conspiracy theories are generated to prove or disprove unfairness between two parties or plots to hurt the population. Premium bonds are not isolated from these kinds of attacks. Conspiracy theorists have accused the National Savings and Investments agency of defrauding the public and being bias in the way they hand out the prizes and pick out the numbers of the bonds. These conspiracy theories are meant to hurt the agency and they are being reported in blogs and other methods to bring the idea of premium bonds to a halt.

The National Savings and Investment agency has issued statements that debunk these theories and preserve their integrity. Their number generating machine, ERNIE, creates random numbers that correspond with the numbers on the bonds. Large drawings are held each month and some people believe that the number generating is fixed. One of the most bizarre theories is that some people believe that ERNIE is a super computer that knows how a person thinks. People have even sent ERNIE Christmas and Valentine Day cards to the computer in hopes that it will sway its picks. This is totally untrue; the machine is totally random and does not have the capacity to know anything.

Psychologists have made the assumption that even the employees of the National Savings and Invest agency does not even know how the numbers are picked by ERNIE. The people that make the theories have a intrinsic need to know how a process works and when they do not know, they will come up with ideas that make them feel more comforted. Ironically, most of the conspiracy theories come from people who have never won any of the cash prizes and they feel that they are not in control of the situation.

The maximum holding for premium bonds is thirty thousand pounds. A theory exists that only the maximum amount in the system will generate winners for those people only. If you do the statistics thirty thousand pounds has a better chance of winning than if you have just two or three thousand pounds invested in bonds. Again people with the lower amount of money invested are perpetrating the theory. With over a third of the population of Great Britain investing the premium bonds system, so people may never win a cash prize nor see their investment grow.

There is a theory that only new premium bonds are winning. This may be true. Though the program has been going on for decades, there has been a surge of new buying since the one million pound prize was introduced. Again the numbers come into play, the more that people play, the less chance you will win a cash prize. As with any lottery system, the more people that play and save, the more people will lose.

The good thing is larger prizes and more money can be put into the system where people who win will make a larger profit. By doing the simple math, most of these theories are debunking themselves.

www.redbet.co.uk

Article Source: http://depositarticles.com/

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