Premium Bonds

utab007

Hello,

I was thinking of getting £30k worth of premium bonds. The web site says you can expect a return of around 1.30% per Annum from prizes. This is approx the same as an easy access account on market today and there is always a chance I may get lucky with a big prize with premium bonds.

I don't see I have much to lose if there is no tie in. I just thought I would ask here before I jump in..any thoughts?

Thanks

dunstonh

I was thinking of getting £30k worth of premium bonds.

Why?

I don't see I have much to lose if there is no tie in.

Inflation is the biggest thing.

Would you put the money in a savings account with a bank and then use the interest to buy lottery tickets? That is what you are doing with Premium Bonds.

Mr_K

dunstonh wrote: »

Why?

Inflation is the biggest thing.

Would you put the money in a savings account with a bank and then use the interest to buy lottery tickets? That is what you are doing with Premium Bonds.

Yes, IFA's aren't big fans of Premium Bonds, wonder why ?

You can't go that far wrong with them. The return will probably be less than inflation, but so are instant access saving accounts at the moment. I've 'won' £25 this month, but that barely keeps pace with inflation, so its not a win really.

On the plus side - your capital is as safe as safe can be. The wins are tax free and don't need to be declared as income. Its instant (ish) access, there's a remote possibility of a substantial win and its a little bit of fun. So long as you're not putting all your savings into it and its part of a 'balanced portfolio'.

utab007

Thanks Dunstonh. As saving rates have plummeted nothing much out there is going to beat inflation. You're a quick to point out inflation, but offer no alternatives

Ha ha ha. Mr K, yes my thoughts exactly. Perhaps £30k is too much to put in.

SailorSam

Have you see Martins premium bond calculator ?

http://www.moneysavingexpert.com/savings/premium-bonds-calculator/

dunstonh

Yes, IFA's aren't big fans of Premium Bonds, wonder why ?

Because they average tiny equivalent rates for most people.

You're a quick to point out inflation, but offer no alternatives

Cant point out alternatives when we dont know objectives.

Ifts

utab007 wrote: »

Perhaps £30k is too much to put in.

If you are wanting to keep the £30k easy access and not willing to take any risk, then there is very little* difference between easy access account rates and premium bonds when it comes to inflation risk.

If you want no risk easy access to your £30k then PB's are ok esp if you are a higher rate tax payer.

*unless if you are prepared to go with a Santander 123 @ 3% (2 accounts per customer) or similar current accounts that beat savings account rates but you will have to meet their T&C's to get the little extra, also you are limited to how much you can put away in them.

HappyMJ

utab007 wrote: »

Hello,

I was thinking of getting £30k worth of premium bonds. The web site says you can expect a return of around 1.30% per Annum from prizes. This is approx the same as an easy access account on market today and there is always a chance I may get lucky with a big prize with premium bonds.

I don't see I have much to lose if there is no tie in. I just thought I would ask here before I jump in..any thoughts?

Thanks

yeah...that's if you win..

I hate premium bonds......the lottery is a much better bet not that I even recommend that. Not spending the £30,000 on tickets but with the interest you get on it. You can get 3% fairly easily on your money.

Archi_Bald

HappyMJ wrote: »

You can get 3% fairly easily on your money.

If you only have £30K, that is true. If you have more, you cannot get 3%, easily or otherwise.

HappyMJ

Archi_Bald wrote: »

If you only have £30K, that is true. If you have more, you cannot get 3%, easily or otherwise.

Spread it around...no need to have it all in one place.

Ifts

Archi_Bald wrote: »

If you only have £30K, that is true. If you have more, you cannot get 3%, easily or otherwise.

I would have thought it would be easier to get closer to 3% if you had a little more than £30K, 2 x Santander 123 accounts with £40k (£20k in each) would be better than £20k in one and only £10k in the 2nd 123 account.