Answered by Shaykh Muhammad ibn Adam al-Kawthari
What is the ruling on Premium Bonds according to Hanafi Fiqh?
In the name of Allah, Most Compassionate, Most Merciful,
Contrary to shares , premium bonds do not represent the ownership of the holder in a company or a financial institution, rather it only signifies giving a loan to the issuers of these bonds.
Due to this fact, the excess amount received on these bonds, which is stipulated and sought from the contract, is regarded as usury (riba), and is thus unlawful (haram).
Contemporary scholars have declared all transactions with regards to prevalent types of bonds unlawful, as it involves interest (riba). (See: The resolutions of the Islamic Fiqh Academy).
And Allah knows best
Muhammad ibn Adam al-Kawthari, UK
[ U.K. savings bond with cash prizes: in the United Kingdom, a savings bond issued by the Treasury and purchased by the public, on which no interest is paid. Instead, there are monthly draws for cash prizes. Encarta ]
[BOND: Finance certificate promising repayment of debt: a certificate issued by the government or a company promising to pay back borrowed money at a fixed rate of interest on a specified date – ibid .]