NS & I Premium bonds
- Thread starter jordan282
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Why not put the maximum £30,000 in?
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
What a waste.
Because in essence all Premium Bonds are is a savings product thats pays 1.5% interest. Only instead of paying 1.5% to everyone, it pays 1.5% of everyones investment to a select few as 'prizes'. There is a 40 BILLION to 1 chance of winning the jackpot, so that isn't really going to happen.
So, the crunch line is that the average return from premium bonds is quite pathetic and a decent savings account or other investment will pay you more.
People do it because they think they might win or because they 'get a prize every few months'. Wow! Invest £30,000 and get 50 quid every couple of months. What a great idea. Alternatively bang it in a decent fixed rate account and get twice that EVERY month.
Seriously, just don't bother. They are not worth it.
No, it really isn't.
If you are that desperate to gamble put it in a savings account and spend the interest on lottery tickets or horses or something.
OMG WOW!!! But for how much? He has a significant amount of money there which could do so much better pretty much anywhere else!
Tell you what, why not invest your £30k in FoxBank? I'll send you 10 cheques for a quid every month and I'll offer you odds of 20 billion to 1 that I'll give you the jackpot. Sound good?
[TW]Fox;21528457 said:
I can only quote what he has told me. Seems like he has been very lucky. All i am saying is that there isnt much of a risk chucking 10K into the premium bonds for a year to see what comes up. Maybe nothing but worth a punt if nowt else to do with the money.
Go for it.
It is by no means a good use of 10k, but you're right that there's no real risk in doing so.
But maybe this will convince you....
Put 10k into an ISA at 3% (easy to find) and you will have £10300 at the end of the year.
Put 10k into Premium Bonds and you can expect to have £10100 at the end of the year. Source
On average you will be £200 worse off, unless you get lucky. Now clearly you're interested in Premium Bonds because you want a chance to 'win' something.
Well the chance of you winning 1 million pounds, from your 10k Premium Bonds is 1 in 100,000 (or 0.001%). [Same source as above]. And you're thinking, well I've got to be in it to win it, right?
Well now consider if you put your money into an ISA, you'd have been £200 better off. You could now take this £200 and buy some lotto tickets. Here your chances of winning the jackpot, with a single ticket are 1 in 14 million. With £200 of tickets your chances of winning the jackpot are 1 in 70,000 (or 0.0014%).
You now still have £10,100 but you have a BETTER chance of winning MORE money, than with Premium Bonds.
That's not even considering the added benefit of tax free savings you get with your 10k in an ISA and also that on average your lotto returns will be slightly higher than calculated, because I did it for the jackpot only, whereas with Premium Bonds the calculation is for all prizes over the year.
It's your money, but there are far, far better options than Premium Bonds.
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Pointless with that tiny amount. I have had a few hundred pounds in there since i was born, i have won £50 maybe 4 or 5 times in my life. (22 years)