30k into Premium Bonds

[mehuk]

Anyone else done this?

I know its a punt as such, as you dont get interest and will only average out at winnings - £400 is the circa annual amount on 30k (but you always have that never know factor that the thing strikes the million).

Anyway, with ISAs full, debts cleared (bar the mortgage) if you had 30k or have done this with 30k, what would put you off/other option would you take?

 

[ots3go]

Interest rate on the mortgage?

Could be worth putting the £30k into that to save money over the long run.

You weren't the guy boasting about having £30k and not knowing what to do with it, were you?

 

[Abraham]

with my mortgage I'd stick it into that, I could put that much in without being penalised and it would save me over £400 a year.

 

[iviv]

http://www.moneysavingexpert.com/savings/premium-bonds#are

Generally, you'd be better off with a savings account.

 

[mehuk]

Interest rate on the mortgage?

Could be worth putting the £30k into that to save money over the long run.

You weren't the guy boasting about having £30k and not knowing what to do with it, were you?

No, ive not boasted about having any money iirc.

Potentially long run, but the mortgaged property is rented out and brings in a bit of a profit, but I believe the more of the mortgaged thats paid off the more tax ill be paying on that propertys income, which I dont want to do. We currently live in one of the in laws propertys whilst we look for something else to buy, so this wedge of cash may well eventually go into a deposit for that.

So its possibly a short term 1-2yr investment as such, is it worth that gamble for a couple of years to see if the thing brings in more than the average?

 

[arknor]

premium bonds? you may aswell buy 30k worth of scratchcards or lotery tickets bet the odds of a bigger return are higher

 

[mehuk]

premium bonds? you may aswell buy 30k worth of scratchcards or lotery tickets bet the odds of a bigger return are higher

I believe they are - but there is also no guarantee that id get the 30k back. Worst case with these bonds after 2 years is that ill get just 30k back, on average id get back 30,800 and anything more than that if I break that line.

I know its not ideal for maximum return, but im trying to convince myself that as its a short term thing (probably) then having that guaranted safety alongside the 'gambling' aspect is worth it.

 

[HeX]

premium bonds? you may aswell buy 30k worth of scratchcards or lotery tickets bet the odds of a bigger return are higher

Except if you bought cards and lottery tickets the cash would be gone

Whereas with Premium Bonds you can get it back whenever you want.

 

[lozza23_uk]

premium bonds? you may aswell buy 30k worth of scratchcards or lotery tickets bet the odds of a bigger return are higher

Really? Great advice

 

[Hatter The Mad]

Anyone else done this?

I know its a punt as such, as you dont get interest and will only average out at winnings - £400 is the circa annual amount on 30k (but you always have that never know factor that the thing strikes the million).

Anyway, with ISAs full, debts cleared (bar the mortgage) if you had 30k or have done this with 30k, what would put you off/other option would you take?

Put £15k of it into a NS&I inflation-linked savings certificate (£15k person limit, tax-free). 5%+ interest at the moment.

 

[Dunks]

I believe they are - but there is also no guarantee that id get the 30k back. Worst case with these bonds after 2 years is that ill get just 30k back, on average id get back 30,800 and anything more than that if I break that line.

I know its not ideal for maximum return, but im trying to convince myself that as its a short term thing (probably) then having that guaranted safety alongside the 'gambling' aspect is worth it.

Factor in inflation too, you might even lose money.

 

[Burnsy2023]

Premium bonds are not short term investments. You're return will be pointless over 1-2 years. I suggest investing it another way.

 

[Hatter The Mad]

Premium bonds are not short term investments. You're return will be pointless over 1-2 years. I suggest investing it another way.

Doesn't the amount decompose year-on-year (it isn't linear - ie you'd average £400 in a year but over two you'd average £750)?

 

[[FnG]magnolia]

Haven't we had this thread already in the last day or two? Am I going mad?

 

[Vonhelmet]

£400 on a £30k investment? Hahahahah.

Doingitwrong.

 

[Greebo]

Premium bonds used to be a "good" investment if you were prepared to take a gamble as a higher rate tax payer as they used to pay out 5% on average tax free so you would need to get 8.33% gross to compete. Of course, 5% is what you should average in wins but no guarantee. On the other hand you might win the £1m or even a £50,000.

Nowadays they only pay out 1.5% so even if you are a 40% tax payer that is only 2.5% gross which is easy to find an investment which gets you higher than a guaranteed 2.5% gross.

 

[Energizer Bunny]

Put £15k of it into a NS&I inflation-linked savings certificate (£15k person limit, tax-free). 5%+ interest at the moment.

Probably a better bet than Premium Bonds in terms of returns.

 

[Vonhelmet]

Probably a better bet than Premium Bonds in terms of returns.

EDIT: I can't read.

Yes, indeed.

 

[arknor]

Really? Great advice

i didnt say it was good advice as said the odds of actually making a return on scratchcards is better than the odds of actually hitting it big with bonds

your almost garunteed atleast to get your money back on scratchcards just as you are with bondsthey let you win enough to keep tempting people to buy more.

bonds are a waste of time is what im saying

 

[Delboy]

I'd say if you've exhausted all other good investment opportunities (ISAs etc) and you are a bit of a gambler then why not...my grandfather invested 8k and always gets the odd £500 here and there. He even got £5k a year or so ago.