Prize bonds are not only available at State Bank of Pakistan, National Saving Centers and designated branches of commercial banks, but also on the secondary market through agents and brokers.
What is a secondary bond market?
There is a complete market that is working on the dealings of prize bond in the main cities of Pakistan. Various dealers and brokers maintain stocks of prize bonds. They sell these bonds at a higher price to make a profit. Although it is costlier to buy prize bonds from secondary markets when compared to the primary market, there are many different reasons why people prefer them.
Here are few of the reasons why people prefer to buy prize bonds through the secondary market:
One of the basic reasons behind buying prize bonds from the secondary market is their availability. When prize bonds are not available at the National Saving Center or any other primary market, they are very much present in the secondary market. Even during shut period, when it is impossible to find prize bonds anywhere else, the brokers and dealers sell them.
2. Lack of trust in the government
People find it more difficult to trust the government as compared to the dealers they personally know. The agents are considered more trust worthy and generally provide personalized service. They also believe that as the draw falls under the control of the government, it might hold onto bonds or let you sell those bonds without telling you about the prize on it. Secondary market does not have any influence on the draw and is perceived to be a neutral body.
3. Additional services
Agents also provide other services than just selling bonds. The additional services include delivering the bonds on the buyer’s doorstep, providing lockers to keep them safe among others. Due to these value-added activities, big investors like to purchase these bonds through agents instead of buying it directly from the primary market.
4. Flexibility of choice
Many people believe that some numbers are especially lucky for them. Through agents and dealers in secondary market, they can get numbers of their own preference. This is not possible when buying prize bonds through primary dealers.
To conclude, due to the above-mentioned advantages, buyers prefer to buy prize bonds from secondary market even if they are more expensive. The bonds available in the secondary market have usually already passed the two months duration. Hence, Prize bonds’ buyers may not have to wait for two months before being eligible for a prize. The closer the date of draw arrives, higher the price of these bonds will be.