Premium Bonds and ERNIE
Premium bonds are bonds that do not pay interest. They do something much better. You purchase premium bonds and let it sit just like in a savings account. Each month there is a lottery and if your bond number is picked, then you have a chance to win over a million dollars. Over one and a half million cash prizes are given away each month and if your bond number is picked, you win from fifty British pounds to well over a million pounds. The great thing is if you do not want to participate in the program anymore you can take back your money like it was never invested at all. This program is so popular that over a third of the population of Great Britain participates in it.
What are the premium bond prizes? Recently, the total prize amount for premium bonds was £96,395,075. The prizes are bundled into higher value (£5,000 to £1-million), medium value (£500 and £1,000) and lower value prizes (£25, £50 and £100). There are around 3.3 million prizes in total every month.
Unlike the American lottery system where numbers are picked randomly from bouncing or air blown balls, Great Britain uses ERNIE to generate numbers from premium bonds. ERNIE is a random number generator hardware system and has been around since 1957. ERNIE first generated the bond numbers by picking up on signal noise from a bank of neon tubes. It was the size of a mini van and could only generate about 2000 numbers an hour working off the noise from a bank of neon lights. The first number generator lasted almost seventeen years and was replaced by an updated version in 1972.
The computer age came to age in the eighties and in 1988 ERNIE 3 was invented. The generator was about the size of a personal computer but ran at no where near the speed personal computers run today. It took ERNIE 3 almost six hours to generate the numbers for the monthly lottery. ERNIE 4 came of age in April 2004 and was used through Feb 2019 when so many bonds were sold ERNIE 5 was needed to handle 11 digit numbers. ERNIE 5 working at speeds five hundred times as fast as the original model, ERNIE 5 is powered by quantum technology. It can compute the draw in 12 minutes.
Once the numbers are generated, a staff of hundreds validates the generated numbers with real bond numbers that the numbers match. Once matched, prizes are allotted to the public. The machine is checked over monthly to ensure proper validation and to keep the system honest. With over a million and a half winners monthly, the machine keeps every thing running smoothly. The investments pay off as winners are awarded their prizes depending on the order that their premium bond number was generated.
ERNIE is so popular in Great Britain that the machine actually receives cards on holidays such as Christmas. Jethro Tull, a poetic singer and song writer even wrote mentions of ERNIE in his song, “Thick as a Brick.” The magic of ERNIE and the thrill of lottery and a chance to win a million has the majority of the population of Britain investing more and more. The idea that your money can earn more than a mere one or two percent that savings accounts earn has the British public flocking to the bank to let ERNIE make them a million.
