NS & I Premium bonds

Disco Boy · 22 Mar 2012 at 18:38

koolpc said:
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.

Yes there is... statistically, you will make less money than putting it in a savings account or an isa.

koolpc · 22 Mar 2012 at 19:05

Disco Boy said:
Yes there is... statistically, you will make less money than putting it in a savings account or an isa.

Unless i win some good 'interest'

thepeteh · 22 Mar 2012 at 19:44

I'm almost slightly embarrassed to say I have a lot of premium bonds. I hope to be as lucky as my parents who had a 4% return in the first 12 months, they also enjoyed getting the letters through the door the odd month.
I will give mine a year and see what happens, then when I end up being unlucky I will be moving my £ into a savings account with a steady interest rate.

koolpc · 22 Mar 2012 at 21:39

thepeteh said:
I'm almost slightly embarrassed to say I have a lot of premium bonds. I hope to be as lucky as my parents who had a 4% return in the first 12 months, they also enjoyed getting the letters through the door the odd month.
I will give mine a year and see what happens, then when I end up being unlucky I will be moving my £ into a savings account with a steady interest rate.

That sounds good to me.

[TW]Fox · 22 Mar 2012 at 21:42

koolpc said:
Unless i win some good 'interest'

But you probably wont - so put it in a savings account and spend the interest on lottery tickets for better odds.

I don't get peoples irrational love for these things :/

Disco Boy · 22 Mar 2012 at 21:45

koolpc said:
Unless i win some good 'interest'

Feel free to trade the likely statistic that you will make less for the much less likely statistic that you will make more, but please don't try and convince others to lose money with you without giving them the facts.

DIABLO · 22 Mar 2012 at 21:52

Nexus said:
I put in £100 a few years ago, but not had anything yet.
My Mother has a little invested and has won a few very small amounts.

In complete contrast though, my Dad has had the full amount for more than thirty years and has never won anything.

So you can kind of see why they say it's not really a worthwhile investment unless you've got some cash to spare.

I'm sorry but this has got to be incorrect or your dad has the worst luck in the history of man kind...

oli356 · 22 Mar 2012 at 21:55

I've had around £1k of them, since I was like a toddler. I've never won anything!

koolpc · 22 Mar 2012 at 22:54

[TW]Fox;21533014 said:
But you probably wont - so put it in a savings account and spend the interest on lottery tickets for better odds.

I don't get peoples irrational love for these things :/

'Might' though

Vanilla · 22 Mar 2012 at 23:16

I have the maximum. I think I put it in just as the economy started to look a bit shakey so I've had them for a good few years.

I have to highlight that I don't need the cash, in fact I don't even think about the bonds. I live aborad now so the wins go to my mums address - she recognises the envelopes, opens them and pays them into my UK bank account for me once every few months.

I kept them in there for a few reasons:

1.) Wanted to spread around my cash rather than having too much in one bank (I was a few weeks away from putting some of it into that Icelanding bank kaupsomething which soon went under!).
2.) Interest rates soon dropped like a rocket so I had less incentive to move the money into a savings account.

I usually win 50-100 every month. I'm probably going to move the bonds out and iinto a savings account for flexibility.

Edit: If there's an NS&I tool that will show you how much you've won over the year i'll happily use it and post the results.

iviv · 22 Mar 2012 at 23:24

The stupidity on display on this thread is really disheartening.

koolpc · 23 Mar 2012 at 09:12

iviv said:
The stupidity on display on this thread is really disheartening.

Agreed. Nothing wrong in having a little gamble

div0 · 23 Mar 2012 at 09:53

koolpc said:
Agreed. Nothing wrong in having a little gamble

I think the stupidity he's referring to are the people who put money into Premium Bonds, for a chance to 'win' something.

If you want a 'safe' investment, then on average an ISA gives far better returns.

If you want to gamble, I've already shown you how you can have a BETTER chance of winning MORE money by 'investing' in other ways. It's a total no brainer. Why is this not sinking in?

meghatronic · 23 Mar 2012 at 10:20

div0 said:
If you want a 'safe' investment, then on average an ISA gives far better returns.

Define average.

div0 · 23 Mar 2012 at 10:30

meghatronic said:
Define average.

What? Seriously?

I don't even know where to start with this.

Here's my earlier post, if you're still confused, I'll try and explain further.

div0 said:
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.

meghatronic · 23 Mar 2012 at 10:48

div0 said:
What? Seriously?

I don't even know where to start with this.

So, your answer without getting your knickers in a twist, would be ~3%, as per your earlier post that I missed.

Although mine is significantly less than that, but, unless I win this month, my ISA has given me about £10 more than my bonds this tax year (same amount in each).

div0 · 23 Mar 2012 at 10:52

meghatronic said:
So, your answer without getting your knickers in a twist, would be ~3%, as per your earlier post that I missed.

Although mine is significantly less than that, but, unless I win this month, my ISA has given me about £10 more than my bonds this tax year (same amount in each).

I think I see what you mean. Apologies for 'getting my knickers in a twist'. Was genuinely confused as to what you were trying to get at with your question.

I wasn't talking about an 'average' ISA.

I was talking about 'average' returns you can expect from a Premium Bond investment.

What rate do you get on your ISA? It shouldn't be hard to get something at around 3%, even without any tie-ins.

kingy666 · 23 Mar 2012 at 11:03

I Have had my £200 of premium bonds for nearly 2 years and last month I won £25.

"Even the odds of winning £25 are 1 in 24,000" Quoted from iviv's post.

Looks like i got lucky so i think i should cash in while i am ahead.

When i "invested" in the PB's i thought that i would stick £200 in them instead of spending £5-6 on the lottery every week which would mean i would have spent around £300 in a year and may got nothing back. But at least with the PB's you get your money back. I would not, however, put a large amount of money into PB's as you should not see them as something to give you a a set return on your money you can only think of them as a "very long term bet with your money back if you fail to win". If you have a little bit of spare cash, and your ISA allowance has been used up then why not.

meghatronic · 23 Mar 2012 at 11:22

div0 said:
What rate do you get on your ISA? It shouldn't be hard to get something at around 3%, even without any tie-ins.

Apparently, it's 1.98%, but will move to 2.98% next tax year in a few days. I'm debating locking in, which should get me up to 4%, and I'll move some of my bonds over. Although, I have 'won' quite a bit this year so I'll miss them

.

[TW]Fox · 23 Mar 2012 at 12:12

meghatronic said:
Apparently, it's 1.98%,

So the only reason why your Bonds have almost equalled your ISA is because you had a poor ISA - its important to keep track and move around once a year.

Fixing probably isnt worth losing the flexibility for only a small gain, the best ISA allowing transfers in at the moment is Santander at 3.3%.