What is a prize bond drawing?

A prize bond drawing is an incentive that some countries use to motivate their citizens to purchase savings bonds from the government. Purchasing a prize bond enters the bearer in a drawing for tax-free cash prizes. For example, in February 2015, 27,904 prize bond investors won over €2 million.

In Ireland, the National Treasury Management Agency governs the prize bond drawings. All bond purchases place money in the hands of the Irish government, and the NTMA manages all state savings. Pakistan is another country that offers investors the chance to win significant prizes simply for purchasing bonds and investing money.