Chorus Financial is an award-winning, privately owned brand based in Spain. Our team have over 30 years combined experience in investing and advising British families on their pensions, savings, investments & tax planning.



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Spanish Equivalent of Premium Bonds
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Is There a Spanish Equivalent of Premium Bonds?

Premium Bonds, offered by the UK’s National Savings and Investments (NS&I), are a popular choice among savers and investors due to their unique prize draw structure. As an expatriate living in Spain, you might be wondering if there is a direct Spanish equivalent to Premium Bonds. However, it’s important to understand that Spain does not offer tax-free investment products in the same way as the UK does.

In Spain, the closest investment vehicle with tax-efficient features would be Spanish Compliant Bonds. However, they function differently compared to Premium Bonds. Here are some key differences:

  1. Interest vs. Prizes: Premium Bonds do not pay interest. Instead, the interest that would have been paid is pooled into a prize fund, and bondholders have a chance to win tax-free prizes through a monthly draw. Spanish Compliant Bonds, on the other hand, offer potential growth or income based on the performance of the underlying investments. The returns aren’t guaranteed, and there’s no prize draw element.
  2. Tax Treatment: Premium Bond prizes are tax-free in the UK, while Spanish Compliant Bonds offer tax deferral benefits. This means any growth in your Spanish Compliant Bond isn’t taxed until you make a withdrawal. At that point, only the gain element of the withdrawal is subject to tax.
  3. Investment vs. Savings: While Premium Bonds are more of a savings product with a bit of a gamble, Spanish Compliant Bonds are a type of investment. The returns from a Spanish Compliant Bond are dependent on the performance of the underlying investments you choose.
  4. Access to Funds: With Premium Bonds, you can cash in your bonds at any time without penalty. Spanish Compliant Bonds, however, may have surrender charges if cashed in within a certain period, typically in the early years of the bond.
  5. Estate Planning: Unlike Premium Bonds, Spanish Compliant Bonds offer an estate planning advantage. Upon the bond holder’s death, the proceeds from the bond are paid directly to the nominated beneficiaries, bypassing the often lengthy and complex Spanish probate process.

While Spain does not have a direct equivalent to the UK’s Premium Bonds, Spanish Compliant Bonds do provide an option for expatriates looking for a tax-efficient investment vehicle. As with any investment decision, it’s vital to consider your financial goals, risk tolerance, and individual circumstances.

At Chorus Financial, our team of financial advisors are experienced in both the UK and Spanish financial landscapes. We can provide advice tailored to your needs and help you navigate the complexities of managing your wealth in Spain. If you need further guidance, please feel free to reach out to us.


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