Premium bonds? Worth it?

DiscoDave said:
My Premium bonds account has returned more money than what I would have got with a standard cash ISA.

Those saying "no" - Why?
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Because you'll be in the minority and PB's have no guaranteed return. Yes you may be better off with PBs, but then you may be even better off if you invested the same funds in lottery tickets.

Other investments you'll definitely have a return, which may be lower.
 
kinetic747 said:
£8500. Please note that nowhere in this thread have I said they're a sound investment, just that it's somewhere safe until I decide what else to do with the money. I'm in no rush though so there's still a chance of a bigger prize. :)
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A 2% return isn’t bad over eight months (compared to current cash ISAs for example). :)
 
D.P. said:
The problem is the mean returns is meaningless because you either get a prize or you don't, and the vast majority of bonds wont win, and thus the vast majority of people with PMs don;t win either.

The median return is 0. So it is perfectly normal to never recieve anythng ever unless you have a decent amount of PB
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Whilst the main point of your post is true, the median return is not 0.

Premium bonds go up to a maximum of £50k, where the median return is between £500 1% and £750 (we do also know it can't be above 1.4%, so must be closer to £500). Unfortunately the calculator I'm looking at isn't detailed enough.

https://www.moneysavingexpert.com/savings/premium-bonds-calculator/

For £20k you have a 55% chance of earning at least £250 which would be 1.25%.
 
muon said:
Whilst the main point of your post is true, the median return is not 0.

Premium bonds go up to a maximum of £50k, where the median return is between £500 1% and £750 (we do also know it can't be above 1.4%, so must be closer to £500). Unfortunately the calculator I'm looking at isn't detailed enough.

https://www.moneysavingexpert.com/savings/premium-bonds-calculator/

For £20k you have a 55% chance of earning at least £250 which would be 1.25%.
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My point was, unless you have a lot of PB, the median return is zero.
 
D.P. said:
My point was, unless you have a lot of PB, the median return is zero.
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Even with a £1000 you have a 38.7% of people will win £25 or more. With £2000 that rises to 62.5% for at least £25.

So it depends on what your definition of "a lot" is. For the median to truly be £0 you would have to hold something like less than £1500 (where 52% of people will win £25 or more).

I'm nitpicking but to say for the vast majority of people the return is £0, is I would say false.

D.P. said:
The problem is the mean returns is meaningless because you either get a prize or you don't, and the vast majority of bonds wont win, and thus the vast majority of people with PMs don;t win either.

The median return is 0. So it is perfectly normal to never recieve anythng ever unless you have a decent amount of PB
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Ok, thanks for the insights all.

From what I read £500 wouldn't get me a lot but £2000 is reasonable chance of return?

I do the post code lottery lol.
 
muon said:
Even with a £1000 you have a 38.7% of people will win £25 or more. With £2000 that rises to 62.5% for at least £25.

So it depends on what your definition of "a lot" is. For the median to truly be £0 you would have to hold something like less than £1500 (where 52% of people will win £25 or more).

I'm nitpicking but to say for the vast majority of people the return is £0, is I would say false.
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I know how the maths works, the point i was making is that the majority of people have relatively little in PBs, and thus have very low likelihood of wining. the stats I saw indicated that the median was zero. So if you won £25, you are doing better than 50% of the PB owners. This is probably just a reflection of a few hundred thousand people being gifted £100 PBs at some point etc.
 
Short term savings it’s definitely worth a punt .

Being part self employed I shove all due tax into bonds each month , over the last three years I’ve won £500 on a total of a 32k in investment ( not all at the same time though ) , probably had 12k max in there at any point.
 
In terms of savings then, as I might have them in for a couple of years, would be people advise buying them?

How do I buy them? I might chuck a grand in one for a bit. I keep a couple of grand aside for when I get into trouble for a few months grace.
 
helpimcrap said:
In terms of savings then, as I might have them in for a couple of years, would be people advise buying them?

How do I buy them? I might chuck a grand in one for a bit. I keep a couple of grand aside for when I get into trouble for a few months grace.
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Have you read any of this thread, if you want to buy them, then going to their website might be a good start .... ..
 
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