Prize Bond fund hits record

THE prize bond fund has increased by 50% in 30 months to hit a record €1.2 billion.

However, the surge in sales and the static rate of encashment has resulted in higher odds of having a bond number emerging as a jackpot winner – up by almost 70 million to one since 2008 to 192m/1.

Yesterday, the Prize Bond Company Limited published its 2009 annual results and sales results for the first half of 2010 which shows that the public is having a renewed love affair with prize bonds despite the higher odds of winning the top prize. The odds for a single bond to win any cash prize in each draw is 32,262/1.

Unlike the one-off national lottery, prize bond holders are entered into weekly and monthly draws for up to €1 million tax free while retaining the right to cash the bond at the purchase price of €6.25.

Some bond holders have held their bonds for more than 50 years. The company says that a customer with €1,000 invested (160 bonds @€6.25 each) has a 4/1 chance of winning a cash prize in a 12-month period.

Gross sales in the first half of 2010 totalled €193m, on par with the same period in 2009. Encashments in the first half of 2010 came to €63m, resulting in net sales of €130m. The value of the fund now stands at €1,203m. It was €803.5m at the end of 2008.

“Gross sales in 2009 totalled €370m, the highest sales of prize bonds of any year to date. This represents an increase of 32% on the peak gross sales in 2008 of €279m.”

Encashments of prize bonds in 2009 remained steady, totalling €101m. This resulted in net sales of €269m, up 53% on 2008.

The total value of the fund at the end of 2009 exceeded €1 billion for the first time in the history of the Prize Bond scheme,” the company said yesterday.

Chairman Michael O’Keeffe said: “We are delighted to report on the prize bond schemes’ enduring success and popularity which has led to record sales of over half a billion euro in the past 18 months. The risk-free and win-win nature of the investment continues to appeal to investors, driving record sales in 2009 and 2010.”

The €1.2bn invested in prize bonds is paid directly into the Exchequer and forms part of the national debt under the management of the National Treasury Management Agency.

The prize fund is determined by calculating interest on the eligible fund at a rate determined by the NTMA.

Since September 2007 the rate has been 3% a year. Some €27m was paid out in prizes in 2009 and at the current fund level at least €36m will be paid out this year. One bond purchased in Dublin in March 1957 won €19,046 in March 1996 and the prize remains unclaimed.


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