Book
Chapter 1
UNDERSTANDING PRIZE BONDS: THE BASICS
What are Prize Bonds?

Just like money, Prize bonds are bearer instruments for investment. This means that the holder is the owner. They are issued by the Ministry of Financeto motivate citizens to invest & earn big prizes. There are two types of Prize Bonds: Basic and Premium. This section covers the Basic Prize Bonds.

Rs. 100/-

Rs. 200/-

Rs. 750/-

Rs. 1500/-

Rs. 7500/-

Rs. 15000/-

Rs. 25000/-

Rs. 40000/-

A normal bond does not demand a lot of legal documentation. The investor has to fill a form as the only requirement to buy the bond. However, the stamped date on the bond holds importance as it shows when the holder becomes eligible for the prize.

Prize Bond are a source of government borrowing. Till date the government has raised approximately Rs. 130 Billion, through this scheme. They also serve the purpose of encouraging investment & savings mindset in public.

The Ministry of Finance is working on introducing higher bonds offering huge amount of prizes. The future of prize bonds is blooming as more people are always looking for safe investment choices. However, it is best to invest only after understanding the complete dynamics of how prize bonds work.


Who Sells Prize Bonds in Pakistan?

In Pakistan, the authorized issuer of prize bonds is SBP BSC. Other than this, National Savings Center and designated branches of banks can also sell prize bonds. The authorized banks can only offer encashment for prize bonds of up to Rs. 1,250. If the amount exceeds, the process will be completed at SBP BSC.

To look for the closest National Savings Center Branch, Click here


Government Bodies Involved

It is also vital to know all the designed offices associated with the creation, printing and drawing of prize bonds. The prize bonds are printed by Pakistan Security Printing Corporation, whereas Central Directorate of National Savings manages all government savings for the benefit of public. Public Debt Office issues securities to generate debt from masses.

Legally, the prize bonds are held under Public Debt Act, 1944. Although commonly used for investing and winning hefty prizes, prize bonds are also useful to be held as collateral against loans. Depending on your need and requirement, you can use a prize bond for different purpose.


The Goods and The Bads of investing in Prize Bonds

Here is a list of the pros & cons of investing in prize bonds. Check it out!

The Good

1. If you get lucky you earn return upto 1800 X your investment.

2. It is hassle free as there are no lengthy registration procedures involved.

3. You can plan your own flow. You can start with an amount as low as Rs. 100.

4. Prize bond investment is extremely liquid; you can encash it with ease whenever you want.

5. They are also widely accepted as collateral against loan.

6. You never lose your principal amount.

The Bad

1. Prize Bonds are just like Pakistan's currency as they lose value overtime. This makes them a little less attractive compared to other investment options such as gold, whose value does not fluctuate as much.

2. The probability of each bond winning a prize is only 0.0001%