Premium Bonds - reinvest prize money?

manrow

This morning I received a £25 prize on my £1500 premium bonds investment.

An accompanying leaflet suggests reinvesting future prizes which initially sounded inviting! If however everybody does so then surely the chances of winning won't change?

gozomark

they pay out a fixed %age - currently 1.5% - so the more saved there, the higher the prize pot

manrow

Basically true, but a larger pot spread throughout a larger number of potential winners?

gozomark

isn't that what I said ? ie a fixed %age payout

withnell

The advantage is that the bonds are entered into the next draw - the soonest you could get if you cashed the cheque and bought new ones with the money would be in 2 draws

DiggerUK

manrow,
So, do tell me.
If you don't reinvest, how is 25 quid going to change your life.
And as you will increase your future chances of winning by 1 in 60, (that's 1.666666666666r%) when is the party.

Come on, PB's are to bag the big prizes , not 25 quid.
Best of fortune.

cvd

surely the chances of winning won't change

I agree - the chances of winning do not change. That is the chance of each bond winning. But the chance an individual will win a prize increases if that individual purchases more bonds.
If you have £5000 of premium bonds then in 1 year you should, on average win £75 at 1.5%.
If you have £10000 of premium bonds, then in 1 year you should, on average win £150 at 1.5%.
So the chances of each bond winning do not change, but the amount you win should increase.

This month I won six £25 prizes. They came in 6 separate envelopes. It is rather worrying that NS&I cannot programme their computer so that it adds up the prizes by holder number, send out one cheque and save the cost of all that wasted stationery and postage.