Why is everyone so down on Premium bonds on this site.

MILLWALLFC

Why is everyone so down on Premium bonds on this site.

I know the calculator has recently been putup to show what you should be getting. However NS&I have announced from the 1st August interest rates are going up to 4%

This means the chances of prizes has increased

Old odds 24,000 to 1
New odds 21,000 to 1

http://www.nsandi.com/products/pb/rates.jsp

I wonder if te calculator was updated now how far out they would be and you always have the chance of getting lucky. Someone has to win the large money pots.

Happychappy

£20000 invested or bet two years ago, first 12 months less then 2% return. This year since January 2007 return is 2 x £50. This might possibly be the reason why I am down on them and have given it till December before withdrawing the money and investing it elsewhere in other growing markets like immigration.:rolleyes:

dunstonh

Why is everyone so down on Premium bonds on this site.

You answered it in your next comment. "announced from the 1st August interest rates are going up to 4%"

Ignoring the fact it isnt interest but an equivelent, 4% isnt exactly much to get exited about. Indeed, its less than the current RPI so if you get the average you are losing money in real terms.

MILLWALLFC

I have had the full holding for around 6 months and i seem to be getting slghtly more than if i had it in a high interest account.

If i had 30k in a HSBC online saving account i would only be getting just over £100 after Tax.

Also this also the chance of getting lucky and getting a bigger prize. Now with the odds reduced hopefully even more £50 winners.

melancholly

MILLWALLFC wrote: »

Also this also the chance of getting lucky and getting a bigger prize. Now with the odds reduced hopefully even more £50 winners.

there's also the chance of getting nothing - don't forget that!

rubuhoeikanaika

Not to mention that, as with the lottery, your chance of winning the jackpot with 10 bonds is not significantly greater than that with 1 bond... ten times a negligible amount is still negligible in this case.

Are you only keeping them because of the psychological pull of the big wins?

rubuhoe

susanjfp

I am not!!! I guess it depends on the tax situation and diversification one is after. I have the max in Premium Bonds along with decent share portfolio, 52 building society accounts (yes carpetbagging!!), ISA's, cash in bank and some ETF's plus of course house. For me as 40% tax payer the benefits of P.B are greater than a standard tax payer and give me that bit of extra divesification i am after as i would not want everything tied up in shares/building societies for instance. Plus they give me that bit of fun each month when i check to see if i have won anything that i can never get from seeing the interest added to a bank account and the subsequent removal of even more of the interest when i do my tax return.

Gorgeous_George

I don't understand why PBs are on a Savings and Investments Forum whereas matched betting is on a Gambling Forum. MB is NOT gambling. PBs are gambling.

I dislike PBs even more when people claim that they get their stake back with PBs. You simply cannot get your stake back as this would make it NOT a stake. Your stake is the interest that you forego by giving the Government your money.



GG

Innys

susanjfp wrote: »

I am not!!! I guess it depends on the tax situation and diversification one is after. I have the max in Premium Bonds along with decent share portfolio, 52 building society accounts (yes carpetbagging!!), ISA's, cash in bank and some ETF's plus of course house. For me as 40% tax payer the benefits of P.B are greater than a standard tax payer and give me that bit of extra divesification i am after as i would not want everything tied up in shares/building societies for instance. Plus they give me that bit of fun each month when i check to see if i have won anything that i can never get from seeing the interest added to a bank account and the subsequent removal of even more of the interest when i do my tax return.

Why not just invest in the Index Linked certificates from the NS & I?

As a higher rate tax payer, you're quids in and don't lose money in real terms either. Yes, you don't get that "bit of fun", but, let's face it, does that really matter?

dunstonh

Innys wrote: »

Why not just invest in the Index Linked certificates from the NS & I?

As a higher rate tax payer, you're quids in and don't lose money in real terms either. Yes, you don't get that "bit of fun", but, let's face it, does that really matter?

I would also add to that spot on response that saving/investing doesn't just consist of cash or stockmarket. There are other other investment classes such as fixed interest funds and property funds. Plus there are other tax wrappers available and ways to invest to reduce or negate higher rate tax liability. Such as putting you low/no yield funds in unit trusts but keeping higher yield funds in the ISA. Use of onshore/offshore investment bonds. Zero yield investment trusts.

Premium bonds, if you get the average, lose you money in real terms. So, its not some safe haven. Its a Govt sponsored lottery with your returns. £20k in premium bonds is worth around £14000 after 10 years. So, you better hope you won more than £6000 otherwise you going backwards.

Primrose

Susanjpf - 52 Building Society Accounts !!! I hope you don't die because I'd sure as hell hate to have to be your executor and sort that lot out, even if I could track them all down.