By Ariba Shahid and Abdullah Niazi
F
or anyone that has ever solicited advice in Pakistan about saving or investing small sums of money, chances are they have been told to invest in prize bonds. Prize bonds are a unique method of investment that are essentially lotteries backed by
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the government. Offered by National Savings under the State Bank of Pakistan (SBP), prize bonds have been around for decades and are considered an incredibly safe form of investment. Essentially, it does very much work like buying a lottery ticket, except in case you don’t win, you still don’t lose any money. Let us say you go to the state bank and give them Rs 100, and in return they give you a prize bond worth Rs 100. Now, every three months,
the government draws lots to see if any prize bonds win any money. If you happen to win, then you can cash in your prize bond and collect your winnings. If you do not win anything, you can either wait for the next draw or simply turn in the prize bond to the bank in exchange for the Rs 100 you paid for it. Since for the longest time prize bonds have not been registered, you could trade them easily and even use them as cash. Sounds nice and simple, doesn’t it? Well,
