Premium Bond interest to DROPS from 1.8% to 1% in April & new £25 prize

popeye_2

When I was doing my electrical training in the ROYAL NAVY I was taught that no electrical component is without bias. It's physically impossible to produce something that is totally without some kind of flaw.
I have £200.00 worth of Premium Bonds. I've had these for, probably, 35 years. I have had winnings of a couple of £50.00's.
What I can't understand is how the odds that are quoted are calculated. The last time I looked it was something like 25,000 to 1 for a single bond. Thus with £200 worth I could win at odds of 1 in 125.
My point is, is ERNIE actually that random given it is an electrical circuit with bias's? What actually are the odds of me winning with my £200 worth?

agsnu

popeye wrote: »

My point is, is ERNIE actually that random given it is an electrical circuit with bias's? What actually are the odds of me winning with my £200 worth?

ERNIE 4 uses Johnson–Nyquist noise (thermal noise), which is white. It's quite a well studied method for generating "true" random numbers (see here).

ChuckCash

popeye wrote: »

My point is, is ERNIE actually that random given it is an electrical circuit with bias's? What actually are the odds of me winning with my £200 worth?

According to wikipedia:
ERNIE's output is independently tested each month by an independent actuary appointed by the government and the draw is only valid if the output passes tests that indicate it is statistically random.

So it's as random as the actuary is independent or wikipedia is accurate :rolleyes:

scotinlondon_2

Suggestions please - I have £20k in premium bonds left by a relative who liked a bit of a flutter - should I move the money & where to??!!! (Cash ISA allowance is full for 08/09 and will be filled for 09/10)

littlemrtinkle

This still beats the lottery, you get to gamble and get your original stake back.

0rchidea

scotinlondon wrote: »

Suggestions please - I have £20k in premium bonds left by a relative who liked a bit of a flutter - should I move the money & where to??!!! (Cash ISA allowance is full for 08/09 and will be filled for 09/10)

You have to move the money anyway, you can't keep them in someone else's name. I personally am getting a far better return on PB's than any bank can offer, I hold the max, and have 6 months to March, been averaging 4.5% interest - I'm sticking.

nrsql

popeye wrote: »

When I was doing my electrical training in the ROYAL NAVY I was taught that no electrical component is without bias. It's physically impossible to produce something that is totally without some kind of flaw.
I have £200.00 worth of Premium Bonds. I've had these for, probably, 35 years. I have had winnings of a couple of £50.00's.
What I can't understand is how the odds that are quoted are calculated. The last time I looked it was something like 25,000 to 1 for a single bond. Thus with £200 worth I could win at odds of 1 in 125.
My point is, is ERNIE actually that random given it is an electrical circuit with bias's? What actually are the odds of me winning with my £200 worth?

By my calculation at 1 in 125 per draw you would have a 50% chance of winning at least once in 86 draws = just over 8 years. 2 wins in 35 years is probably a bit low.
Wining in 18 years (216 draws) is 82% chance.

The chance at the moment I think is 1 in 36000.

urbans01

0rchidea wrote: »

You have to move the money anyway, you can't keep them in someone else's name. I personally am getting a far better return on PB's than any bank can offer, I hold the max, and have 6 months to March, been averaging 4.5% interest - I'm sticking.

Well, you must be having above average luck... I'd cut and run as it's unlikely to last. I hold the max too and my 6 month return has been averaging 1.15%.

g4jnw

the change has come at a strange time for me as we usually at all costs leave the onds where they are, we have 10k and usually win a few £50s a year but we were thinking of changing the car and will need about 4k. we were going to get finance and pay it back in august as we have an insurance bond due. It now makes our decision easier, we will draw the money out of the bonds and put it back in august. If its fate that we win the big one we will come up with the remained :rotfl:

NPowerUser

Better to have more smaller £25 prizes then one extra million pound prize.

Chances of me winning a prize must therefore increase, as there are now more prizes on offer.

I haven't got to win many £25 prizes to thrash the rates offered by my old Nationwide Instant Cash ISA.