THERE USED to be a time when, if a child was being baptised, the standard-issue present to buy that child was a Prize Bond.

There was a fairly simple logic to it, a little like occasionally buying somebody a scratchcard: it’s a relatively cheap gift which could have a high payoff, and can be cashed in at any time.

To hark back to those old days, we thought we’d go back to the trivia hat and pluck some things you might not have known about Prize Bonds.

1. They’re older than the average Irish person

Prize Bonds were first introduced under laws introduced in 1956, under then-finance minister Gerard Sweetman of Fine Gael – who is perhaps better remembered for his decision to hire the 39-year-old TK Whitaker as the Department’s Secretary.

Indeed, the Act providing for Prize Bonds – the Finance (Miscellaneous Provisions) Act, 1956 – was one of the first pieces of legislation produced by the Department after Whitaker’s appointment.

Though they’re usually known now as being a product of An Post (which jointly administers them with Fexco, on behalf of the National Treasury Management Agency), it was originally Bank of Ireland which issued them – which made sense, given that the government itself did its business with Bank of Ireland at the time.

The first draw was held in March 1957 – by which time Sweetman was succeeded by FF’s Seamus Ryan, though Whitaker remained at the helm of the Department, a post he held for another 13 years.

2. The mechanics of the first ever draw is written into law

Think of your average parish raffle, and the casual manner in which a ticket could be drawn from a box or a tombola. Not so with the original first draw – where the pomp and ceremony of the occasion meant the method for choosing a winner was written into law.

So, if you ever need a precise description of the mechanics of running a raffle, look no further than the ‘Prize Bonds (First Draw For Prizes) Regulations, 1957′. Its provisions include such commands that…

mixing of the counters shall be effected by rotation of the apparatus

…and…

after mixing has been effected, the apparatus shall be brought to a stop.

A little more prescriptive than spinning the wheel on Winning Streak, no? It also demanded, legally, that the first draw take place at the Bank of Ireland HQ on College Green.

3. The demand for them keeps going up and up…

You might think that with the competition in the banking market, and the opportunities that people have in investing in overseas assets, that the demure Prize Bond might not be the most attractive investment option.

Think again – the most recent figures available, for the 2010 calendar year, show that €399 million (million!) worth of Prize Bonds were sold in 2010, while only €142 million of the bonds were converted back into cash.

That’s a net growth of €257 million for 2010, on top of a similar growth – €269 million – in 2009.

By comparison, the prizes don’t cost particularly much – even when including the monthly €1 million prize that someone wins every month, the total prize fund cost the NTMA about €34.4 million in 2010, while the scheme cost €11.5m to operate.

4. …and, by and large, it’s a good way for Ireland to raise cash

Again looking at the 2010 accounts, Ireland’s balance of Prize Bonds stood at €1.33 billion in 2010, with prizes and costs costing €45.9 million. That’s 3.45 per cent of the total amount – or, to put it another way, the costs of running the scheme are 3.45 per cent of the money it brings in.

In our current bailed-out mode, if we wanted to borrow a similar amount on the bond markets for nine years, we’d be asked to pay around 7.35 per cent interest each year – and then give all the money back at the end.

Put in that context, it’s a relatively nice way for the government to raise cash – though it’s of questionable value for bond-holders, the value of whose investment goes down over time thanks to inflation (unless, of course, they win a prize in the meantime).

5. They account for over 1% of national debt

We don’t quite know for sure exactly how much it accounts for, but the NTMA shows that the national debt – as of the end of April 2012 – was €129.6 billion.

In the same year, the total value of Prize Bonds issued (again, at the end of 2010) was €1.33 billion – which is over 1 per cent of the country’s total debts.

Assuming the sales of Prize Bonds for 2011 exceed the amount being cashed in – and given the figures for 2009 and 2010, there’s no reason to expect a collapse – the proportion could be even higher.

6. The odds of winning a prize aren’t all that bad

Given that the unit cost of a Prize Bond is €6.25, and knowing there are €1.33 billion of them out there, it’s reasonable to estimate that there are about 212.8 million different bonds issued right now.

In every weekly draw, there are around 8,400 winners – ranging from a top prize of €20,000, which is given to one winner, down to the 8,383 people who win a €25 prize every week.

That means each of the tickets has a 25333-to-1 chance of winning a €75 prize every time you enter. By comparison, you have a 669/1 chance of winning a prize of that amount in the National Lottery.

But, when you throw in the fact that your €6.25 Prize Bond is eligible for every single draw (until you choose to cash it in again), it turns out that if you hang onto a Prize Bond for at least 38 weeks, you’ve a better chance of winning a €75 prize in the Prize Bonds draw than in the Lotto.

7. It’s possible that they might have to be killed off…

As we pointed out, Prize Bonds account for over 1 per cent of the national debt (though a lesser portion of the government debt, which includes banking liabilities and all that).

Under the terms of the Fiscal Compact, Ireland has to get its government debt below 60 per cent of its GDP – down from the 108.2 per cent that it stood at by the end of 2011.

It would seem fairly logical that relatively low-key savings options like Prize Bonds could be cut as a result. Although Prize Bonds are a cheap way of getting cash for the state, they’re a little unpredictable: unlike long-term bonds, their holders could demand their money back at a moment’s notice.

But…

8. …the government has no plans to scrap them just yet

We asked if there was any possibility of this – or other State Savings operations, such as the National Solidarity Bonds which repay 50 per cent over five years – and were given an assurance.

When asked if the government would propose to scrap the scheme, or buy back any bonds currently issued, a spokesman for the Department of Finance said there were “no plans” of any sort.