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Definitions from WordNet

Definitions from the Web

Premium Bond

Definition

A premium bond refers to a type of bond that is issued by the government or a corporation and is sold at a price higher than its face value. The bond issuer offers a higher coupon rate or interest payment to compensate for the premium price paid by the investors.

Senses

1. Financial Sense

In the financial context, a premium bond is a bond that offers a higher interest rate than the prevailing market rate. Investors are willing to pay a premium for such bonds due to the increased yield compared to other available options.

Example sentence: John decided to invest in premium bonds as they provided a superior return on his investment compared to regular bonds.

2. Savings Bond Sense

In the United Kingdom, "Premium Bond" is the name of a savings bond offered by the government-backed National Savings and Investments (NS&I). It is a type of investment where the interest payments are replaced by a monthly prize draw for bondholders.

Example sentence: Mary won £500 in the monthly Premium Bond prize draw, which was a pleasant surprise for her.