National Savings & Investments has set up an online facility for Premium bonds.
NS&I, the post office savings provider backed by the Treasury, has unveiled a facility that allows money to be paid into premium bonds using a credit or debit card over the Internet.
The online application procedure is confirmed by e-mail. First-time customers will then receive a confirmation letter requiring a signature and further evidence of identity, while existing customers who already hold Premium Bonds will simply be sent their new bonds and will not have to sign and return any paperwork.
Premium bonds were launched through the post office in 1956 as a way to encourage people to save more money. The accounts do not pay interest, but instead savers are entered into a draw each month with tax-free prizes worth between GBP50 and GBP1 million randomly picked out by a computer called Ernie.
NS&I’s move is a timely one: following a period of decline between 1998 and 2001, the level of funds invested in NS&I products has picked up. This revival has been heavily influenced by strong sales of Premium Bonds, which saw total funds invested double from GBP13.8 billion in January 2000 to GBP26 billion today.
The initiative expands its previous efforts to develop this key product, which have included raising the maximum investment threshold to GBP30,000, the launch of telephone sales in July 2004 and the introduction of a regular payments scheme for monthly standing in October 2004.
Indeed these efforts also come on the back a veritable commercial makeover at NS&I. This program has included rebranding, expansion of the product range, direct and aggressive marketing, a focus on product simplicity and a diversification of distribution channels.
If these developments prove successful over the longer term, NS&I should be able to capture a broader, younger target audience, securing its place as a unique and respected part of the mainstream financial services market.
