National Bonds

Dave · 2 Apr 2010 at 13:50

Hey all

Was just wondering if people have any experience with these? I've got about 2 grand to put away for about 3 or 4 months, and with savings accounts the way they are today it doesn't really seem to make too much sense putting it in a savings account for a few months.

I was thinking about putting it in national bonds and praying for a prize - is it relatively simple to pull the money out of the bonds again? The website seems to make it sound very easy to pull your cash out of the bonds when you want, but is it that simple in person?

Many thanks

PapaLazaru · 2 Apr 2010 at 14:18

Are these the same as Premium Bonds?

If so, I can only report good things. My old man won £20k last year and my uncle, who is an investment nut, also believes they offer a very good return.

pimper · 2 Apr 2010 at 14:18

If we are talking about Premium Bonds then, Yes i have over £3000 in Bonds, and it is a good choice to put the money into Bonds, although you dont get interest on the money, if you win a prize it could mean that you get more than what you would have got on interest. so for that bods are very good.

Bonds are easy to get and are easy to get back, all you need to do is, either go o there website and find out what do do to be able to do it online or you can visit the post office and get a form that yo fill out and send back and they will put the amount of money that you want back into your building society or bank account within a few days. it is very simple to get bonds and to have the bonds put back into cash. and it is more of a benefit to have bonds these days imo.

KPeh · 2 Apr 2010 at 14:21

The return rate on premium bonds, reflecting the current interest rate is very low. You'll get a better return in a savings account or somesuch.

Still, peope like the lottery element of premium bonds.

silversurfer · 2 Apr 2010 at 14:27

premium is better then the lottery, effective return is about 1% I think

normal bonds are just more secure then a bank but all banks are good for 50k anyway

and the best ones are index linked which means every time inflation goes up your interest is increased and you get 1% on top as well tax free. uk is the worlds largest issuer of index linked gilts and labour has a history of producing 30% inflation, lovely.
If petrol gets to 150p a litre your'll want these

pimper · 2 Apr 2010 at 14:29

Well i just looked on teh internet's n i found some interest rates on savings accounts and the average was around the 2% "there were higher but required a large deposit" so this only really works out at around 40 - 50 pounds a year, whereas the smallest win on the bods is £25, but u have 2000 chances of winning every month, so thats 24000 chances of winning £25 at least every year, but thats if you are very damn lucky to win 2000 times every month, so id still say that it pays to have the money in bonds. + any winnings on the bonds is non taxable.

Dave · 2 Apr 2010 at 14:30

Ah yes, Premium Bonds, sorry. I'm in China at the moment so it's probably the nationalism flood that's caused that slip up

Think I might chance it - even if I don't win anything from them, I'll only make a few pounds (if that!) from sticking it in a savings account for a few months.

PapaLazaru · 2 Apr 2010 at 14:32

Go for it. Chance is a great thing.

pimper · 2 Apr 2010 at 14:32

Dave said:
Ah yes, Premium Bonds, sorry. I'm in China at the moment so it's probably the nationalism flood that's caused that slip up

Think I might chance it - even if I don't win anything from them, I'll only make a few pounds (if that!) from sticking it in a savings account for a few months.

yep because if your only keeping the money in a savings account for 3 - 4 months you wont get any interest on it anyway. At least i dont think you do.

KPeh · 2 Apr 2010 at 14:32

pimper said:
Well i just looked on teh internet's n i found some interest rates on savings accounts and the average was around the 2% "there were higher but required a large deposit" so this only really works out at around 40 - 50 pounds a year, whereas the smallest win on the bods is £25, but u have 2000 chances of winning every month, so thats 24000 chances of winning £25 at least every year, but thats if you are very damn lucky to win 2000 times every month, so id still say that it pays to have the money in bonds. + any winnings on the bonds is non taxable.

You're falling for their sales language here. There is one draw in which you have a range of bonds (£1 is one bond). The chance of winning £25 with £2000 is not big if only in for a few months. The first month additionally wont count towards the draw.

KPeh · 2 Apr 2010 at 14:33

pimper said:
yep because if your only keeping the money in a savings account for 3 - 4 months you wont get any interest on it anyway. At least i dont think you do.

You could get £15-20 with a savings account (a well chosen one).

killari · 2 Apr 2010 at 14:33

silversurfer said:
and the best ones are index linked which means every time inflation goes up your interest is increased

The real yield on nominal bonds are often higher than that of I-L bonds, with I-L you are betting on inflation being high. If its not you can end up with low returns.

silversurfer · 2 Apr 2010 at 14:49

Its more like the other way round, the index linked always return 1% above inflation and the nominal ones you may end up with low or negative returns after inflation.