Premium Bonds are a popular investment option in the UK, offering a unique way to save money while having the chance to win tax-free prizes through a monthly prize draw. However, unlike traditional investments that provide regular interest payments, Premium Bonds don’t earn interest. Therefore, investors may eventually want to cash them in, either to access their money or to invest elsewhere.
In this article, we’ll provide a detailed guide on how to cash in your Premium Bonds, explain the processes involved, and address common questions about the timeline and requirements for withdrawing your funds.
What Are Premium Bonds?
Premium Bonds are a government-backed savings product issued by the UK’s National Savings & Investments (NS&I). Instead of earning interest, bondholders are entered into a monthly prize draw where they can win cash prizes ranging from £25 to £1 million. Each bond costs £1, and the more bonds you hold, the better your chances of winning.
Premium Bonds are attractive to many people because they offer security (as they are backed by the government) and the possibility of tax-free winnings. However, since they don’t generate interest, some bondholders may eventually decide to cash them in for liquidity or higher-yield investments.
How to Cash in Premium Bonds
Cashing in your Premium Bonds is a simple process, but it requires following a few important steps. Whether you prefer doing it online, by post, or over the phone, NS&I offers multiple ways to access your money.
Cashing in Online Through NS&I Website
For many people, cashing in Premium Bonds online is the quickest and most convenient method. If you have already registered for NS&I’s online services, you can easily request to cash in your bonds through their website.
Steps for Cashing in Online:
- Log into your NS&I online account.
- Navigate to the “Cash in Premium Bonds” section.
- Select the amount you want to cash in, whether it’s all your bonds or just a portion.
- Confirm the bank account where you want the money to be paid.
- Submit your request and wait for the confirmation.
Funds are typically transferred to your bank account within 3 to 5 working days. If you cash in all your bonds, your remaining chances of winning prizes will be forfeited immediately.
Cashing in by Phone
If you prefer handling your transactions over the phone, you can call NS&I’s dedicated helpline to cash in your Premium Bonds. This method is straightforward and allows you to speak with a customer service representative who can guide you through the process.
Steps for Cashing in by Phone:
- Call NS&I on their official number, which is available on their website.
- Provide your personal details, such as your NS&I number and security information, to verify your identity.
- Indicate how many bonds you want to cash in.
- Confirm your payment details for the funds to be transferred to your bank account.
Like the online process, payments usually take around 3 to 5 working days to reach your account.
Cashing in by Post
For those who prefer more traditional methods, you can also cash in your Premium Bonds by post. This option may take longer, but it is a viable method, especially for those who are not comfortable with online or phone transactions.
Steps for Cashing in by Post:
- Download and print the Premium Bonds cash-in form from the NS&I website, or request one by phone.
- Fill out the form with your details, including the number of bonds you wish to cash in and your bank account information.
- Send the completed form to NS&I using the address provided on the form.
- Wait for confirmation and payment, which may take up to 8 working days from the time NS&I receives your request.
If you are unable to print the form at home, you can contact NS&I to have a cash-in form mailed to you.
How Long Does It Take to Cash in Premium Bonds?
The time it takes to receive your funds after cashing in Premium Bonds depends on the method you use. If you opt for the online or phone methods, the process is relatively quick, and you can expect the money to reach your bank account within 3 to 5 working days. Cashing in by post takes longer, usually up to 8 working days.
Keep in mind that if you submit your request during the prize draw period (usually at the beginning of the month), it may affect your chances of winning that month’s draw. NS&I advises customers to submit cash-in requests after the monthly draw if they want to maintain their chances of winning for that month.
Partial vs. Full Cash-In: What’s the Difference?
When cashing in your Premium Bonds, you have the option to either withdraw a portion of your bonds or cash in all of them. Understanding the difference between these two options is important for making the best decision.
Partial Cash-In
If you choose to cash in a portion of your Premium Bonds, you will still retain some bonds, and these remaining bonds will continue to be entered into future prize draws. For example, if you own 5,000 Premium Bonds and choose to cash in 2,000, you’ll still have 3,000 bonds entered into the draw each month.
This option is ideal for those who need access to some of their funds while still keeping a stake in the prize draw for future winnings.
Full Cash-In
If you choose to cash in all of your Premium Bonds, you will no longer participate in the monthly prize draws. After your bonds are cashed in, your name is removed from the draw, and you will not be eligible for future prizes. This option is usually chosen by people who want to exit the Premium Bonds scheme completely, either to access all of their savings or to invest the money elsewhere.
How Are Prizes Affected When You Cash In?
One of the key questions people ask when cashing in their Premium Bonds is whether they’ll lose their chances of winning prizes. The answer depends on when you request to cash in and how NS&I processes your withdrawal.
During the Prize Draw Process
Each month, the prize draw occurs at the start of the month. If you submit your request to cash in before the draw date, you will miss out on that month’s draw. NS&I recommends waiting until after the prize draw to submit your cash-in request to avoid forfeiting your chance of winning that month.
After the Prize Draw
If you wait until after the prize draw has taken place, your bonds will still be eligible for that month’s prizes. Once the draw is completed, you can request to cash in without worrying about missing out on a potential win for that period.
see also: How to Make Money on Webull for Beginners
Can You Cash in Premium Bonds for Someone Else?
In some cases, you may need to cash in Premium Bonds on behalf of someone else, such as a minor or a deceased relative. The process for doing so is slightly different but can still be straightforward.
For Minors
Parents or guardians can cash in Premium Bonds for children under the age of 16. You will need to provide proof of guardianship and complete the necessary forms. The money will be paid into a bank account in the child’s name or transferred to a designated account by the guardian.
For Deceased Bondholders
If you are managing the estate of a deceased person who owned Premium Bonds, you will need to provide documentation proving your role as executor or administrator of the estate. NS&I has a specific process for handling bonds of deceased bondholders, and it is recommended to contact NS&I directly for assistance in these cases.
Conclusion
Cashing in your Premium Bonds can be done quickly and easily, whether you prefer to do it online, by phone, or by post. The process typically takes between 3 and 8 working days, depending on your method of choice.
Whether you are looking to access a portion of your savings or cash in all of your bonds, understanding the process will help ensure you get your money quickly and without hassle. Make sure to consider the timing of your withdrawal to avoid missing out on any potential prize winnings. With the proper approach, cashing in your Premium Bonds is a straightforward way to access your funds.
Related topics:
