Premium Bonds Facts And Figures

Gorgeous_George

Estimated bonds in existence = 36,400,817,647

Monthly prize fund (estimate for September 2008) = £103,135,650 (3.4% / 12)

So, if one of your bonds wins next month, what's the chance that it will be:

(prize and chances in a million) Remember, this is per WINNING bond - NOT per bond.

£1M........1.2

£100K.....4.8
£50K......10.9
£25K......19.9
£10K......50
£5K......101

(prize and chances in a thousand) Remember, this is per WINNING bond - NOT per bond.
£1000....1.24
£500......3.73
£100...114.7
£50.....880

Ok, I'm sure ALL Premium Bonds 'investors' are aware of the stats and fully understand the odds. I just thought the stats were interesting.



GG

Milarky

You've made it too complex GG. People don't hold bonds on the basis of 'stats' anyway - its a mixture of sentiment and gambling instinct.

This old argument will never be resolved - indeed there is no 'right' answer - since for every considered observation on the low likelihoods of even getting a single prize - let alone '3.4%' or better (and inflation? that's 5 percent and rising don't yer know?) there are probably ten posters who wade in and say "My auntie won a prize almost every month in the first six months..." as though that proves their point.

You can't argue with the gambling mentality - merely find new ways to separate it from its money.

jules73_2

Which is why I don't have any:p

Try telling that to my sister....Can you believe, she was moaning to me two months ago that she has to pay a higher monthly repayment on her mortgage because her fixed deal had finished. She could almost pay off her mortgage with the 30k she has in PB......to make things worse, she doesn't even have ISAs....MAD

Some people just can't be told.

mr_magoo_5

Held max bonds for about 7 years and not bothered by the percentage /ratio/odds etc
For us it has worked out fine, dozens of 50's several 100's one 500 and one 10000 !
Its a bit of fun to see if you win each month, not to be taken seriously.

MILLWALLFC

Does anyone know this stat being trying to find online. How many people have the full holding of 30k.

RubyBish

I think the only stats people consider with premium bonds is this:

Probablity of 'winning' £1M with Premium Bonds is >0
Probability of 'winning' £1M with deposit savings = 0

(This ignores that you could convert £30k to £1m with compounded interest in about 50 years with an average rate of 7%)

Premium bonds are a different risk and I dont consider it any different to someone choosing a unit trust or any other investment or savings over a predictable deposit account.

Ialwaysgetdone

I have read about premium bonds on the NS&I site and on this site but am still unsure what exactly happens to your cash so can anyone explain these points please:

It says instead of paying interest they pay prizes yet they say the interest rate is 3.4% ... so does this 3.4% interest rate actually mean that the prize fund increases by 3.4% but your original lump sum investment stays as it is?

Secondly, you can get any winnings reinvested into premium bonds yet the limit of your investment is £30,000 .. I take it that you can't have your winnings reinvested if you are already at £30k or if any win takes you over £30k? (I don't have £30k but nothing wrong with a bit of hope )

RubyBish

Ialwaysgetdone wrote: »

It says instead of paying interest they pay prizes yet they say the interest rate is 3.4% ... so does this 3.4% interest rate actually mean that the prize fund increases by 3.4% but your original lump sum investment stays as it is?

The rate of interest just gives the size of the prize pot in relation to the amount of money held in premium bonds by everyone (capital pot).
If there were only £10000 bonds in existence the prize pot would be £340 for the year.

Ialwaysgetdone wrote: »

Secondly, you can get any winnings reinvested into premium bonds yet the limit of your investment is £30,000 .. I take it that you can't have your winnings reinvested if you are already at £30k or if any win takes you over £30k? (I don't have £30k but nothing wrong with a bit of hope )

When you win with a holding of £30k, you are sent the 'winnings' by warrant (cheque).
The only exception to this is if you have an odd amount like £29,964 (possible only if you have held the bonds for along time when smaller denominations were allowed), you will not have 'winnings' reinvested unless your sell £64 worth to round it down.

Ialwaysgetdone

OK thanks a lot