Premium Bonds - If you post to say how much you've won, please also say how much you have invested.
- Thread starter Feek
- Start date
Everything (including the NS&I site) say that it's the first working day of the month so it's already been drawn.Draws tomorrow so you'll be notified on the 3rd
Are people using premium bonds as they've exhausted every other beneficial place to put money (pension, isa, saver etc.) or as their main point of saving?
I always understood them to be (statistically) a fairly pointless place to put your money, as the majority of people see no return at all.
I always understood them to be (statistically) a fairly pointless place to put your money, as the majority of people see no return at all.
The main downside is the impact of inflation, but as I understand it they do have some plus points:
Capital not at risk and secured by the government.
Tax free.
Average return theoretically 1.4% (although there is clearly an element of luck!).
Small chance of winning big.
Capital not at risk and secured by the government.
Tax free.
Average return theoretically 1.4% (although there is clearly an element of luck!).
Small chance of winning big.
Caporegime
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The S&P500 gained 23% in the last 2 years, if you had £10k in Premium Bonds, unlikely you would have won £2k in that time period. You would need to win consistently £100 a month to match it. I guess it's a safer way to play a lottery where you don't lose your bet pot.
Yeah I've got some money in premium bonds for those reasons. Better average returns than any savings account I could find when I put the money in. Yeah it won't beat a judiciously managed stocks and shares ISA, but there is no risk of losing capital like there is with stocks.
Could also look at it like a permanent lottery ticket except you can get a full refund on the cost of your tickets if you never win
.Obviously with hindsight just investing all my money in the S&P 500 would have been better and still relatively safe compared to picking individual stocks etc, but then I guess years of 'ooh you might lose money as well as gain' have conditioned me to want to keep some of my money 'safe'.
Your right but today is not a working day in Scotland so I guess that's what confused him.
Everything (including the NS&I site) say that it's the first working day of the month so it's already been drawn.
Prize Checker
Ready to see if you have won a prize? Enter your holder's number to check if you’ve won in this month’s Premium Bonds draw. Good luck!
www.nsandi.com
Prize checker updated tomorrow. The email follows a day later.
Soldato
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Yep, premium bonds are basically saving, with your funds back into your hands within about 5 days.
They are not, never were nor will be an investment, they are savings.
As you say with a tiny chance of winning a life changing amount of money.
The return on premium bonds is however lower with lower investment on average as the chances of picking up one of the decent prizes is so low that unless you are incredibly lucky you will see less than the headline return by a significant amount.
I can't remember the point but its something like £30k where over a half decent period you should only fall very slightly below the headline return number, less than that unless your incredibly lucky you stand an every increasing chance of seeing noticeably below the headline number.
Soldato
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Thats incredibly unlikely unless your picking up large wins semi frequently.
The vast vast majority will see less than the headline return
Its not an investment. Risk free, but not really because its being inflated away. If inflation stays well above target that is super corrosive. Suitable place for your cash buffer but 'risk free' is a bit of a red herring.
I think if you need access to the money medium term (<5 years) then premium bonds aren't actually that bad if you have a big lump to deposit. For example right now from a quick look the best savings account is 5% (Yorkshire building society) with strings attached: Must be a customer already, can only deposit £500 a month. Most are in the 1.5-3% range and also have low max deposits meaning if you were saving for something like a house you'd end up with a lot of open accounts which is a hassle to administer. Whereas with premium bonds you're basically accepting a ~1% return on average (with a big lump sum in there) with a small chance you could get lucky. You could obviously do a mix of both and clean up the best interest rates + enter the lottery of PBs...
If you don't need access to the money any time soon then dependant on your personal risk tolerance some form of stocks and shares investment is going to be the way to go.
If you don't need access to the money any time soon then dependant on your personal risk tolerance some form of stocks and shares investment is going to be the way to go.
Caporegime
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Personally between the known 2% return on a savings account vs PB's return average...I'd pick a savings account every time.
Permabanned
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A lot of solicitors recommend premium bonds for short term deposits of large amounts of cash whilst long term plans are made, as it's as risk free as anything gets, has near instant access to the funds and clients have the chance of a win.