Premium Bonds - are they a good investment?

miaxmia

Hi,
I am thinking of investing 30K into premium bonds and wonder if anyone has any success stories or otherwise of whether or not this is likely to be a worthwhile investment long-term (i.e. is the return likely to be more than I would get in a normal savings account). There are a lot of people out there who have invested the maximum and I'm not anticipating big wins, but I would be interested to hear anyone's views on this investment, good or bad. :j

paullwill8

My sister invested 30k Oct last year, she has won:
2x £200, 4x£100 and 1x £1000, jammy !!!!!!.
You do not earn any interest.

Gorgeous_George

You may well hear success stories. Generally, like all lotteries, there has to be a lot of losers to make way for the few big winners.

Personally, I 'invest' less than 5% of my savings in PBs and have never won (only got 500 so I don't feel too aggrieved - can I sue for mis-selling?).

I give the government enough in tax.



GG

ariba10

I have £10,050 invested? in them and have not won anything since last August.

Tia91

My other halfs parents both have the full amount and they both appear to win every month.

:j

Gordon_the_Moron

Premium bonds are a form of gambling, people might tell you otherwise that you can always get your money back so it isn't gambling like a lottery. IT IS, you are gambling the interest, it is no different to putting it in a savings account and buying lottery tickets with the interest.

If you don't NEED the interest go for it, take out some premium bonds and you might make a large profit, you might lose some money (no return when you could have made a decent return in an ISA)

For every person that wins the million pounds there will be other losers, the interest they pay on the bonds is 3% but the average return must be less than 3% to make up for those large winners. You might get loads back you might get nothing, if you don't need the money give it a go

skiddy2k

i'v got £300 (petty i know, but rather have more of my money earning intrest in bank).. havent got anything yet. had the bonds since June 2005.
if i win anything in the next 2 months, it'l be equivilant to at least 16.6% intrest i earn this year from bonds!... fingers crossed... "it could be me"!!!

Lois_Lane

I used to get £50 wins quite regularly until the maximum amount you can hold was increased to £30k (from £20k), and I haven't had a win since.

kristian_2

go for PBs, Ive got 30k and win somthing every month. you will win far more in prizes than intrest in any back account!

dunstonh

kristian wrote:

go for PBs, Ive got 30k and win somthing every month. you will win far more in prizes than intrest in any back account!

statistically, that is incorrect and whilst some might, many will not.

cheerfulcat

Hi, miaxmia,

There are a lot of people out there who have invested the maximum and I'm not anticipating big wins, but I would be interested to hear anyone's views on this investment, good or bad.

I wouldn't call Premium Bonds an investment. At best they could be considered akin to a deposit account paying a variable rate of interest, that rate possibly as low as 0%, but with a remote chance of a big prize. Bear in mind too that while your capital seems safe in nominal terms, in real terms it is being eroded by inflation.

To be honest I think that PBs are a bit of a con. It is a cheap way for the government to borrow money. Fine, if you want a bit of a flutter buy a few but unless you have a lot of spare capital I think that the £30k would be better homed elsewhere.

HTH

Cheerfulcat