R Premium bonds now worth a go?

grey_gym_sock

it is ridiculous to suggest you expect to get 2.5% because that's what you've been getting recently. you should expect to get 1.3%, as has been said.

yes, you can only get about 2% (after paying 20% tax) in an instant access account. but it's probably fairer to compare to a 1-year fix, considering that premium bonds don't pay interest for the first month, so there's no point holding them for a very short time. so perhaps 2.2% after tax.

so you should expect to be worse off with premium bonds (compared to a 1-year fix) by 2.2% - 1.3% = 0.9%.

on £30k, that's £270 per year.

if you value of excitement of having all those chances to win £1m at more than £270 per year, than go for it.

rb10

D1zzy wrote: »

so far over the last 10 yrs I've never had less then 2.5% from PBS ( also never had a big win)

You can't compare what's happened in the past with what may happen in the future, as the Premium Bond prize fund used to be larger.

During the coming year you will most likely receive around 1.3%. If you're happy with that, then go for it. Personally I'd rather get the higher rates on instant access savings accounts than that.

sabretoothtigger

Y'all just jealous and clearly unlucky as sin

rb10

sabretoothtigger wrote: »

Y'all just jealous and clearly unlucky as sin

No, just realistic.

Like all gambling, chances are you'll lose out compared to what you could achieve elsewhere.

However, having said that, Premium Bonds are safer than most other forms of gambling.

jimjames

D1zzy wrote: »

With interest rates crashing are premium bonds now a better bet. I've had 12k for years and Average £300 (2.5%) pa-which now appears to be better than I can get anywhere else. Still waiting for a biggy tho. Seems now might be the time to up my stake

Just because you've got 2.5% over "years" doesn't mean it will continue. The rate may have been 5% years ago which would average out with the current 1.3%.

If you are happy to gamble on getting a return would it be worth considering a S&S ISA?

somethingcorporate

If the best you can do is gamble to get a 1.3% interest rate then you simply are not looking hard enough.

NS&I are averaging about 4% tax free in the last issue (now closed), Nationwide ISAs at 4.25%, I have FD regular savers at 8%, Nationwide Regular savers at 6%. Offset mortgages would offer you far better equivalent rates than the tiny return in PBs.

Edit: The word you are looking for in your title is "Are" not "R" - I cannot believe you were too lazy to even type the full words in your title - it is hardly surprising the best savings rate you can get is so low if that is the level of effort you put in.

DiggerUK

The days when savings a/c's were ahead of price inflation are long gone. Savings a/c's and PB's should only be used for easy access cash, emergency funds, or short term parking of funds. The returns are not that different, a good win on PB's is all that would make a significant difference.

What you need to accept, is that you are on a hiding to nothing with price inflation if you leave money in savings a/c's or PB's. Once that fact has registered, then you can decide if you want to risk exposure to government bonds, corporate bonds, equities, commodities, property, land, or my choice, gold.

You've been around long enough to do your own research.
..._

D1zzy

somethingcorporate wrote: »

If the best you can do is gamble to get a 1.3% interest rate then you simply are not looking hard enough.

NS&I are averaging about 4% tax free in the last issue (now closed), Nationwide ISAs at 4.25%, I have FD regular savers at 8%, Nationwide Regular savers at 6%. Offset mortgages would offer you far better equivalent rates than the tiny return in PBs.

Edit: The word you are looking for in your title is "Are" not "R" - I cannot believe you were too lazy to even type the full words in your title - it is hardly surprising the best savings rate you can get is so low if that is the level of effort you put in.

Ouch!- I could pretend I was simply following GBS mantra "that if we do not spell words as they are pronounced, our readers will pronounce words as they are spelt,"

- actually just more than happy these days to adopt the language of the twitterati

ISA is maxed out; NS&I is maxed out Cash savings ( fixed and instant) currently returning 4.4 % and have just opened the Natwest and Tesco accs so don't feel too lazy

rb10

D1zzy wrote: »

have just opened the Natwest and Tesco accs so don't feel too lazy

So if you have Natwest's 2.82% AER account, you are actually asking:

"Which is better for my savings, 1.3% [Premium Bonds], or 2.26% [Natwest, net rate]?"

D1zzy

rb10 wrote: »

So if you have Natwest's 2.82% AER account, you are actually asking:

"Which is better for my savings, 1.3% [Premium Bonds], or 2.26% [Natwest, net rate]?"

No .....
Stuff maturing/ bonuses ending & dosh that I need to keep instant.
Found the Tesco yesterday - but until that most instants seem to be around 2% and falling which for me brings PBs into the equation as even this year they've paid 2.5%. ( tho I hear wot yr all saying about 1.3%)

-After the yrs of 6/7% and current inflation higher than instant rates I find it hard to get enthusiastic about the latest 2% er PBs have always been just a punt but at least now the potential return s not too dissimilar from mst instant accounts.