Bonus Bonds was a New Zealand unit trust founded in 1970 with a reward scheme based on cash prizes. The

New Zealand government , background_color = #012169 , image = New Zealand Government wordmark.svg , image_size=250px , date_established = , country = New Zealand , leader_title = Prime Minister Jacinda Ardern , appointed = Governor-General , main_organ = , ...

launched Bonus Bonds under the Unit Trusts Act 1960 through the

Post Office Savings Bank Post Office Savings Bank is a name used by postal savings systems in several countries, including: * New Zealand, later renamed the PostBank * United Kingdom, later renamed the National Savings and Investments * Singapore, later renamed POSB Bank * ...

with the goal of encouraging New Zealanders to save money. It was the country's largest retail unit trust, with around one third of New Zealanders owning bonds.

Management

the

ANZ ANZ may refer to: People * Anz (musician), a British DJ and electronic musician Banks * ANZ (bank), Australia and New Zealand Banking Group Limited, the fourth-largest bank in Australia ** ANZ Bank New Zealand, the largest bank in New Zealand ** ...

managed the trust (ANZ acquired PostBank (Post Office Bank Ltd) from the government in 1988). Trustees Executors Limited acted as a trustee for bondholders. Potential customers could purchase bonds from any ANZ branch or from any PostShop. Management invested trust funds in "safe" assets such as corporate securities, government bonds and securities issued by banks.

Prizes

Each month the trust paid out a total of NZ$7.9 million, consisting of 248,000 random tax-paid cash prizes, based on the amount invested, with three top prizes: 1 of $1,000,000, 1 of $100,000 and 1 of $50,000. In order to participate in a draw, investors must purchase a minimum $20 in bonds, and must have held them for a full calendar month. The chances of winning did not exceed 1 in 9,600 per unit - as required by the Finance Act (No 2) 1990. the chance of each unit winning a prize ranged from 1 in 9,600 to 1 in 11,000. In 2015 the odds of winner per unit increased to range from between 1 in 14,000 to 1 in 20,000. A single bonus bond or unit translated to one dollar, and each unit owned had a chance of winning. The average win was apparently around $27.50, giving a tax-free return of around 3.4% . Returns varied based on security returns, and these are of course averaged figures which varied greatly due to the random nature of the investment. Mary Holm in '' The New Zealand Herald'' described Bonus Bonds thus: "As I've said before, having a bit in bonus bonds is fine if you regard it as fun. But it is not the place for major savings". New Zealand personal finance website '' moneyhub'' reported in a study that 99.996% of bonus bonds returned $0 to their owners in a typical monthly draw."Bonus Bonds - are they worth your money?"
moneyhub.co.nz, 30 November 2017 To conduct the draw the Bonus Bonds trust used a random number generator called ELSIE (Electronic Selection Indicator Equipment), based in the Bonus Bonds Transaction Centre in central Dunedin.

Marketing

Comedian A comedian or comic is a person who seeks to entertain an audience by making them laugh. This might be through jokes or amusing Amusement is the state of experiencing humorous and entertaining events or situations while the person or a ...

Leigh Hart (' That Guy') promoted Bonus Bonds in a television advertisement, presenting the bonds as an exciting way to invest, with the catchphrase "the money ''and'' the bag" (referring to '' It's in the Bag'', a long-running New Zealand radio and television game show).

Winding up of scheme

In August 2020, ANZ announced that the Bonus Bonds scheme would be wound up in October 2020, stating that "low interest rates had reduced the investment returns of the scheme affecting the size of its prize pool".

References

External links