This site is about prize bonds, so it would be easy to tell you that prize bonds are the best place for your savings. They are not — for most money, most of the time. Here is the honest comparison, because knowing where a prize bond fits makes you better at using it. (This article is about the ordinary bearer bonds, Rs. 100 to Rs. 1,500. Premium registered bonds are different: they pay a periodic profit at the Government-notified rate in addition to draws, so they sit closer to a savings certificate with a draw attached.)
What an ordinary prize bond actually is
A bearer prize bond is a non-interest-bearing bearer security. Two consequences follow from that definition:
- Your capital is completely safe and refundable at face value at any time. It is a government liability, and you can walk into a counter and get your money back.
- It pays you nothing for holding it. No profit, no interest, no indexation. If you hold a Rs. 1,500 bond for ten years and never win, you get Rs. 1,500 back — worth far less in real terms than when you bought it.
The entire return is the chance of a prize. That makes a prize bond closer to a lottery ticket that refunds its price than to a savings product.
National Savings certificates
CDNS offers a range of certificates and accounts — Defence Savings Certificates, Special Savings Certificates, Regular Income Certificates, Behbood Savings Certificates and others. Compared with prize bonds:
- They pay a declared profit at published rates.
- They are also government-backed, so credit risk is comparable.
- They require registration, a CNIC and normally a bank account.
- Early encashment usually reduces the profit you earn.
Rates are revised periodically by CDNS, so check the current rate sheet at a National Savings Centre or on the CDNS website before deciding.
Bank deposits
A savings account or term deposit gives you convenience and quick access, with profit rates that vary by bank and by tenure. Deposits are covered by deposit protection up to the limit notified by the Deposit Protection Corporation, which is a different kind of safety net from a direct government instrument.
Side by side
| Feature | Prize bond | Savings certificate | Bank deposit |
|---|---|---|---|
| Regular return | None | Yes, declared | Yes, varies |
| Chance of a large windfall | Yes | No | No |
| Capital safety | Government-backed | Government-backed | Bank + deposit protection |
| Liquidity | Encash any time at face value | Encashable, profit may reduce | High |
| Documentation | Minimal (bearer) | Required | Required |
| Loss risk if paper is lost | Total, for bearer bonds | Recoverable | Not applicable |
Where prize bonds genuinely make sense
- As the small, fun slice of your savings — the part you are content to see earn nothing in exchange for a real chance at a large prize.
- As a parked amount you may need soon, since encashment at face value is immediate and unconditional.
- As a gift, because a bearer bond can be handed over without paperwork.
Where they do not
- As a retirement plan or as the home for the bulk of your savings — inflation erodes an instrument that pays nothing.
- As a substitute for an emergency fund that needs to grow.
- As a "strategy" bought on the belief that certain numbers are luckier. Draws are mechanical and random; no number, series or purchase date improves your odds. The only honest way to improve your chances is to hold more bonds — and that costs money you could have invested elsewhere.
A reasonable approach
Decide the total amount you are comfortable holding in something that pays nothing. Buy prize bonds only up to that amount, keep the numbers recorded, check every draw, and put the rest of your savings where it earns a return. That way the prize bond stays what it is at its best: a safe, refundable ticket to a very large prize.