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Premium Bonds - A Good Time To Buy?

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One of the negative aspects of holding premium bonds is the fact that inflation can eat away at your capital, so if we go into a period of deflation that everyone is talking about would this mean it would be a good time to buy premium bonds?

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  • Aegis
    Aegis Posts: 5,695 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Depends what else is available. For the most part, the applied interest rate for premium bonds is historically terrible compared to savings accounts. If that rate goes higher than the best savings accounts, then it might be worth a look, but remember that the odds of getting the really high prizes are so low that you should look at the median winnings amount rather than the mean, as that will give a much more accurate prediction of your projected winnings than the mean for such a skewed distribution.

    Of course, the median is harder to work out when you don't have the raw data, but it will definitely be significantly below the mean.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
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