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Investors choosing premium bonds due to high interest rates

It has been suggested that a growing number of investors have been seeking to put their money into premium bonds in the past few years because of unattractive interest rates.According to Hargreaves Lansdown, premium bonds are likely to have become a popular option with many in recent years because in 2006 interest rates stood at just 4.5 per cent, making savings an unattractive option for some.Mark Dampier, head of research at Hargreaves Lansdown, explained: "People start seeing that returns are tax free if you get them and they are only getting around four per cent from the building society. You can buy quite a lot and if you invest £30,000, you have a fair chance of getting something back most months."From August 1st 2005 there was two £1 million jackpots drawn each month and, at the current odds, over a million other cash prizes. The winning bond numbers are selected at random each month.

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