Premium Bonds Article Discussion Area

chaoszone

It's a myth to call it gambling. It's somewhere in between. If you gamble you are putting a stake on. If you lose you lose all your money. You don't get your stake back. However, with PB you are placing a stake on but you might  or might not gain but you won't lose the stake so your balance sheet is always in the black. The difference between PB and savings is that savings you are guaranteed a trickle of a return but in today's climate the interest rate is so low that the tables have turned somewhat to when this thread was first started. To put it another way, you could buy a lottery ticket or lay bets at a casino. It's either some return or you could end up in the red and would need to win and make back your losses before your balance sheet is in the black

Paul_Herring

If you gamble you are putting a stake on.

The stake, here, being the interest or gains you'd otherwise get sticking the money into a savings or investment product.

So, not a myth.

It's conceptually no different to actually putting it in a savings account, and buying lottery tickets with any interest borne from it.

Sea_Shell

Although there's also the thrill of a possible win, like gambling, but for chickens!!

Paul_Herring

Sea_Shell said:

Although there's also the thrill of a possible win, like gambling, but for chickens!!

Well I'm currently hitting a better "interest rate" with PB's than my Lloyds current account will be getting from October. Not that it's a particularly difficult target to hit...

Sea_Shell

Paul_Herring said:

Sea_Shell said:

Although there's also the thrill of a possible win, like gambling, but for chickens!!

Well I'm currently hitting a better "interest rate" with PB's than my Lloyds current account will be getting from October. Not that it's a particularly difficult target to hit...

On how many bonds, £5000 worth??

Paul_Herring

Sea_Shell said:

Paul_Herring said:

Sea_Shell said:

Although there's also the thrill of a possible win, like gambling, but for chickens!!

Well I'm currently hitting a better "interest rate" with PB's than my Lloyds current account will be getting from October. Not that it's a particularly difficult target to hit...

On how many bonds, £5000 worth??

About £25K, of which about a ⅓ is stoozed for a 0% CC due to be repaid in Feb. Rest is either my emergency fund, or part of my early retirement fund, depending on which I need first...

El_Torro

I just checked the status of my Premium Bonds. In the last year I have earned a return of just over 1.09%. This is accurate, as I have had a constant amount in Premium Bonds, I have not bought new Bonds with my winnings either, just cashed them in. 

While I've had less than average luck in the last year I'm happy with it, especially since my earnings are tax free. I couldn't have done much / any better in current accounts and instant access savings accounts.

bogleboogle

Paul_Herring said:

If you gamble you are putting a stake on.

The stake, here, being the interest or gains you'd otherwise get sticking the money into a savings or investment product.

Except easy access savers currently pay an interest of approx. 0.01-0.2%, so your 'stake' is historically small. And when you consider your odds of beating that stake with, say, £10,000 in PBs are >99%, then it looks even less like gambling. 

The_Bleurk

Interesting!  Pun intended. These last few comments made me do  quick comparison. I got in just in time to get a three year fix at 1.15% ISA with Virgin in April before they withdrew the offer (now only offering 0.75%) - for the 12 months to this month I have had a return of 1.25% on PBs and an average of 1.17% over three years. So not much of a gamble there either way.

Paul_Herring

bogleboogle said:

Paul_Herring said:

If you gamble you are putting a stake on.

The stake, here, being the interest or gains you'd otherwise get sticking the money into a savings or investment product.

Except easy access savers currently pay an interest of approx. 0.01-0.2%, so your 'stake' is historically small. And when you consider your odds of beating that stake with, say, £10,000 in PBs are >99%, then it looks even less like gambling. 

I note you chose to (a) pick up on the low end of savings rates available (higher rates are available,) and (b) ignored investing completely.

It's gambling. No matter how much you want to pretend it isn't, it's gambling.