The seven deadly sins of NS&I Premium Bonds

samhuzz

I like them personally. I have had £50 in since 1989 (my grandad bought them for me and all my cousins) and I have won £50 and £25 from them! Maybe I'm biased, but I agree with Glider, you can get your money back, unlike the Lottery. I was actually saying to my mum the other day (after I won the £25) imagine how much money you'd have now if you'd have put it in Premium Bonds rather than done the Lottery. She plays about £10 a week! :eek:

Quiet_Life

Am buying £100 of premium bonds for my granddaughter, she can cash them in when she's older but in the mean time she might win some money. I loved the fact that someone from Manchester who only had a holding of £45 won £10,000 this month...better than the lottery I think

mikey72

Jonbvn wrote: »

The whole point of this website is to try and help people make the most of their money. As you are well aware (or maybe not?), there are numerous accounts that pay much better than 0.1%, and on average will give you a far better return than PB's.

If you want to gamble, try Ladbrokes.

I tried that, then when I didn't win, they wouldn't give me my money back.
Premium bonds don't do averages, you either win or you don't.
So, you can lose £20 or £30 if you put £1000 in premium bonds for a year.
One win and you're in profit.
Seems like a very good gamble really.

Aegis

mikey72 wrote: »

I tried that, then when I didn't win, they wouldn't give me my money back.
Premium bonds don't do averages, you either win or you don't.
So, you can lose £20 or £30 if you put £1000 in premium bonds for a year.
One win and you're in profit.
Seems like a very good gamble really.

Not really. You've got a 60% chance of winning nothing, and a 30% chance of winning £25. That's a 90% chance of getting a rate of 2.5% or less, while you could get 4% gross on the full amount with instant access (i.e. 100% chance of getting 3.2% net as a basic rate taxpayer). If you then wanted a flutter, you could spend some of the interest on a couple of lines of numbers on the Lottery, and the chances are fairly good that you would still come out ahead of Premium Bonds.

All in all, they're pretty rubbish products.

Now admittedly, 3.2% net on £1,000 is only £32 in a year, but just because it's a small amount doesn't make it economically sound to throw it away for a gamble with very low odds. In terms of scaling, if you wouldn't do it with £10,000 (i.e. gambling £320 of your money on the Lottery - more than most sensible people would ever spend on that sort of gamble in a year outside this product) there's no reason to do it with £1,000 or even £100.

dawyldthing

chance wise it is less than the lottery but i prefer it as you always have the option to get it back and there always the chance to win something, which after years of doing the lottery I can't really say the same for

xrjtg

glider3560 wrote: »

Not strictly true. Some of the links on here are affiliate links, which pay a commission when someone clicks through and produces a lead/sale.

Having meditated on the definition of advertising, and how MSE is run, I concede that you may have a technical victory. But it remains the case (to the best of my knowledge and belief!) that it isn't possible to get Martin to solicit custom for your business by offering him a sufficiently large cheque, which feels very close to "no advertising".

Aegis wrote: »

Now admittedly, 3.2% net on £1,000 is only £32 in a year, but just because it's a small amount doesn't make it economically sound to throw it away for a gamble with very low odds.

You also have the option of spending some of your £32 on lottery tickets, giving you more chance of the big win and still leaving a better average return.

cashbackproblems

edda wrote: »

Martin has a bit of a bee in his bonnet about premium bonds.

I agree with some of his comments, but notice he never mentions that they can be useful to people who lose their higher allowances (for over 65s) at the rate of £2 for every extra £1 earned.

Plus, there are other poor financial buys that aren't referred to so regularly as premium bonds (e.g. cheaper insurance - lower premiums but worse service if you have to claim; a gambling introductory offer forum on a money saving website).

I agree completely, why doesnt he spend his time complaining about lottery tickets or 0% rate current accounts, maybe because it doesnt get as much media attention and the fact so many ppl hold them brings this story to their attention.

I have a small holding of PB's and win on average £50-£250 every 2/3 months which is more than id get if this money was in a savings account.

Aegis

cashbackproblems wrote: »

I agree completely, why doesnt he spend his time complaining about lottery tickets or 0% rate current accounts, maybe because it doesnt get as much media attention and the fact so many ppl hold them brings this story to their attention.

I have a small holding of PB's and win on average £50-£250 every 2/3 months which is more than id get if this money was in a savings account.

It's because most people already see the lottery as the gamble that it is, and most people also realise that getting no interest at all on your money is a bad thing. However, people are generally told that premium bonds are a good investment, and that's just plain wrong.

MacsReturns

I have premium bonds - and I bought them AFTER reading Martin's article about them.

Yes, on AVERAGE, a savings account is better, and the odds of a big win on PBs are minuscule - but you will NEVER win £1,000,000 from a savings account

lvader

MacsReturns wrote: »

I have premium bonds - and I bought them AFTER reading Martin's article about them.

Yes, on AVERAGE, a savings account is better, and the odds of a big win on PBs are minuscule - but you will NEVER win £1,000,000 from a savings account

Most importantly you don't need to move your money into an alternative PB scheme every year in order to keep the same chances of winning.