What is a prize bond?
A prize bond is a small paper bond you buy from the government, a bit like a lottery ticket except that you do not lose your money. The money stays with the government, and the bond carries a number. It earns no interest or profit; instead, if your number comes up in one of the regular draws, you win a prize.
Even if you never win, you can hand the bond back and get what you paid. So the real trade-off is giving up what the money could have earned elsewhere in exchange for a chance at a prize.
Say Farhana uses Tk 1,000 of her Eid money to buy 10 prize bonds. Four draws take place over the year, and none of her numbers come up. When she cashes the bonds at the end of the year she gets back exactly Tk 1,000, not a taka more. Had a number come up she would have won a prize; as it is, all she missed out on is whatever that money could have earned elsewhere.
How it works
A prize bond is a government bond with a face value of Tk 100. It can be bought and cashed at Bangladesh Bank offices, commercial banks and post offices. It pays no interest or profit; as long as you hold it, your number is entered in every draw.
Draws are held four times a year: on 31 January, 30 April, 31 July and 31 October. A committee headed by the Dhaka Divisional Commissioner runs the draw. Only bonds bought at least 60 days before a draw are included in it.
Bonds are grouped into series (such as Ka-Ka, Ka-Kha). Each draw picks 46 numbers, and in every series the bond with that number wins the same prize. The bonds carry no owner’s name, so if one is lost or damaged it is hard to recover.
Total prize money per series per draw is Tk 1,625,000. If a series has about 10 lakh (1 million) numbers, then against the series’ Tk 10 crore, four draws a year pay Tk 65 lakh, or about 0.65% a year on average. After 20% tax, about 0.5%. But that is an average across everyone; most bonds never win anything, and a few win.
Prizes in each series
- First prize (1)
- Tk 600,000
- Second prize (1)
- Tk 325,000
- Third prize (2)
- Tk 100,000 each
- Fourth prize (2)
- Tk 50,000 each
- Fifth prize (40)
- Tk 10,000 each
Claiming a prize
After the results are published, you apply on the prescribed form and hand in the original bond; after checking, the prize is paid by pay order. If you do not claim within two years of the draw, the prize money goes to the government treasury.
Results are published in newspapers and on the Bangladesh Bank and Department of National Savings websites. Keeping a separate list of your bond numbers and series makes checking easier.
The Shariah question
Prize bonds pay no interest, but prizes depend on chance. Scholars differ on whether they are Shariah-compliant. If this matters to you, speak to a scholar you trust.
What return to expect
A prize bond gives no guaranteed income. Prize amounts have stayed the same since at least 2007: Tk 16.25 lakh in total per series per draw. Averaged across all bonds, that works out to about 0.5–0.65% a year, far below even a savings account rate.
Because the prize amounts have not changed for many years, inflation has eroded their real value. A Tk 100 bond stays at Tk 100; its price neither rises nor falls, but Tk 100 buys less over time.
The odds are long: the chance of a single bond winning any prize in a given draw is roughly 1 in 22,000 (assuming about 10 lakh numbers per series). The chance of the first prize is far smaller still.
Why people choose it
- The face value is the government’s obligation and can be cashed at any time.
- You can start with just Tk 100.
- Once bought, a bond is entered in every draw automatically.
- Easy to give as a gift.
Points to weigh
- No guaranteed income; most bonds never win anything.
- The average return is very low, and inflation erodes the money’s value.
- Bonds carry no name, so loss or damage is a real risk.
- Unclaimed prizes are lost after two years.
Tax
Tax is deducted at source from the prize money. Under section 118 of the Income Tax Act 2023, in recent years this has been 20%; the Finance Act can change the rate.
There is no tax on buying a bond or cashing it at face value, since no gain is made.
Tax rules can change with each year’s Finance Act. Before a big decision, check the latest rules or speak to a tax adviser.
How to get started
- Go to a Bangladesh Bank office, a commercial bank or a post office.
- Buy as many Tk 100 bonds as you want.
- Write down each bond’s number and series separately, and keep the bonds somewhere safe.
- Check the results after every draw.
Check before you start
- Am I clear whether I see this as saving or as a gamble on luck?
- Have I compared what this money would earn for certain elsewhere?
- Have I written down the bond numbers?
- Do I know where to check results and how to claim a prize?