MSE News: Halifax launches Premium Bond-style savings draw - is it any good?

rb10

StephenM wrote: »

That doesn't tell us anything about how many customers have more than £5000 in their account. A relatively small number of customers with very large balances would skew the average upwards.

Remember that there are also a very large number of dormant (or close to dormant) Liquid Gold accounts with around £10-£20 in them.

Oldbiggles

One thing that occurs to me and doesn’t seem to be mentioned in this thread is that if you have £5000 in Premium Bonds, then you have 5000 chances of a prize each month. But with the Halifax monthly draw you have only 1 chance of winning a prize no matter how much over the £5000 you have in savings with them.
OK so you still get interest on your savings, unlike premium bonds.
Just remember that Banks/Financial institutions are in business to make money for themselves and Halifax are no different to any of the others at getting you to part with some of yours.

:cool:

MoneySaverLog

So I wonder which will offer the better odds of winning, Premium Bonds or Halifax?

pqrdef

MoneySaverLog wrote: »

So I wonder which will offer the better odds of winning, Premium Bonds or Halifax?

I don't understand why people are making this comparison. The Halifax thing is nothing like Premium Bonds, it's like every other free prize draw. Your chances of winning a bean are squat.

MoneySaverLog

Probably same with premium bonds, but which would be the better £5,000 in premium bonds or £5,000 in halifax just on the potential of winning prizes, not interest rates.

pqrdef

MoneySaverLog wrote: »

Probably same with premium bonds, but which would be the better £5,000 in premium bonds or £5,000 in halifax just on the potential of winning prizes, not interest rates.

With PBs you get a number for every £1, and every number has a 1 in 24000 chance of a prize in any given month. That's roughly 1 in 2000 over a year, so with average luck, £5000 will get you 2 or 3 small (£25) prizes per year. The limit of £30000 expects to get 15 prizes a year including a £50, on average. Individual luck will if course vary a lot.

Of course your granny with her single £1 bond is very unlikely to win anything. £25 invested gives you odds of about 1/1000 per month, or one £25 prize in a lifetime. The Halifax draw is somewhere around this sort of territory.

MoneySaverLog

So in terms of winning it is better to play premium bonds with £5,000 then, obviously you just get your stake back here with no interest.

Where as with the halifax draw the odds are higher in terms of winning a prize but you get interest on your money.

pqrdef

In terms of return on your money, 2.8% in the Halifax wins hands down if you pay basic rate tax, assuming average luck. But the prize draw doesn't change anything.

For the chance of a life-changer, save at the best rate of interest and put some of the interest on a horse.

PBs start to look more competitive for higher rate taxpayers.

bowlesbargain

How do I sign up, I have a ISA with £5000 in. I have checked the Halifax site and can find no mention of the Lottery.

10_66

bowlesbargain wrote: »

How do I sign up, I have a ISA with £5000 in. I have checked the Halifax site and can find no mention of the Lottery.

It's not a lottery, it's a prize draw. HERE'S the link for it.