Prize bond: In Pakistan, the government issues lottery bonds called “prize bonds,” which entitle their holders to participate in a regular drawing for the chance to win cash prizes Prize bondholders see these bonds as an investment opportunity, but in actuality, these are savings, not investments. The prize bond scheme is designed to encourage saving and investment.
Here’s how it generally works:
- Purchase: Individuals can buy prize bonds from authorized dealers or directly from government-authorized offices. In Pakistan, the State Bank of Pakistan is the sole authority that manages all the operations of prize bonds, including sale and purchase, prize bond draws, and prize money distributions.
- Draws: The bonds are entered into periodic draws, which are typically held quarterly. Winners are selected through a random draw, and the prizes vary in amount. Prize bond draw schedule 2023. You can also check online and download the draw results in PDF format.
- Prizes: The prize bondholder has the chance to win different prizes, and the highest prize is usually a substantial amount. The prize amount for each bond is given below. All the bonds are subject to tax deductions. The tax rate for filers and non-filers is different.
Denom 1st Prize 2nd Prize 3rd Prize 100 1,000 200,000 700,000 200 1,250 250,000 750,000 750 9,300 500,000 1,500,000 1500 18,500 1,000,000 3,000,000 25000 Premium 300,000 10,000,000 50,000,000 40000 Premium 500,000 30,000,000 80,000,000
- Redemption: Prize bonds can often be redeemed for their face value at any time, providing a level of liquidity for the bondholder.
- No Interest: Unlike traditional interest-bearing bonds, prize bonds do not earn regular interest. Instead, the interest is used to fund the prize pool. But the premium prize bonds bear interest. The interest rate currently is 5.48% biannually. The amount of interest is also subject to tax deduction.
It’s important to note that not all countries have prize bond schemes, and the specifics of how they operate can vary from one country to another. Additionally, participation in such schemes may involve some level of risk, and individuals should be aware of the terms and conditions before investing in prize bonds. The goal of prize bonds is to encourage savings and investment while offering participants the excitement of potentially winning prizes through a random draw.