Odds of winning Premium Bonds lengthen

Jonbvn

http://www.telegraph.co.uk/finance/personalfinance/savings/3481636/Odds-of-winning-National-Savings-Premium-Bonds-lengthen.html

The chances of winning a prize on a single Premium Bond, currently 24,000 to one, will lengthen to 36,000 to 1 when NS&I cuts the rate of return on the prize fund to 1.8pc from the present 2.85pc on December 1.

But the £1m jackpots are unaffected. "NS&I will continue to pay out two £1m jackpot prizes each month," it said.

The total value of Premium Bond prizes will fall from £88m to £57m, and the total number of prizes will be reduced from 1.5m to 1.1m, the organisation estimated.

At 1.8%, I really cannot see why anyone would put their money into PB's.

Lokolo

Because people don't understand the odds. Silly people, they think they will get more from PBs than savings accounts! (obviously some are so low that it might be worthwhile, but come on)

McSaver

That makes them a complete utter waste of time now.

Primrose

I have a fair amount in Premium Bonds but now the interest rates on my other savings has plummeted I think the time has come to bite the bullet and cash them in. Even the amount of interest I will earn on a Fixed Term account will be peanuts, but hopefully more than I would get on PB's.

Pieman1972

Another view on the PB News from the BBC : http://news.bbc.co.uk/1/hi/business/7737003.stm

McSaver

The once popular direct ISA that paid 6.3% is now a petty 3.3%

manhattan

I was just about to put the max into PB's before the end of this month, i am not sure where the hell to put my money now

Savings accounts are paying peanuts and now PB's are even less attractive.


Any advice guys? (and girls)

I need to access the money instantly or could fix for 3 months.

funkyhitman

We're not all stupid people. I know the odds but on average I get the same or more than 6% each year which I'm very happy with and I, like many others, like to hold premium bonds because it's fun and there's a chance to win a lot more. Understandably due to the rate decrease I may win less frequently from now on but I don't hold a large amount and i'm happy to continue with them. Lets face it, the rate will come back up in the future.

I don't think it's fair to compare premium bonds to savings accounts because they have clear differences and intentions.

Jonbvn

McSaver wrote: »

The once popular direct ISA that paid 6.3% is now a petty 3.3%

In the same Telegraph article it is saying their cash ISA is now paying only 2.4%! :eek:

Jonbvn

funkyhitman wrote: »

I don't think it's fair to compare premium bonds to savings accounts because they have clear differences and intentions.

PB's are by far the largest (i.e. most money) "savings" vehicle in the UK. This means that a lot of people are treating PB's as savings.

McSaver

Jonbvn wrote: »

In the same Telegraph article it is saying their cash ISA is now paying only 2.4%! :eek:

lol thats even worse lol thats the post office rate though.