Premium Bonds arbitrage with Santander - Is this free money?

dominoman

I have around 10k in a Santander 123 account that gives me a nice 3% interest per year. Interest is calculated daily.

Is there anything to stop me doing the following:
1. Withdraw my full 10k and buy premium bonds on the last day of the month.
2. Two days later, after the draw, take out all the money from premium bonds and put it back into Santander.
3. Repeat each month.

That way I get 28 out of every 30 days interest at Santander, and I also get premium bonds in every draw.

Now I know it sounds like hassle, and allowing time for money to clear might eat into it a little, but has anyone tried this? Is anything stopping it from working.

kidmugsy

dominoman wrote: »

Is there anything to stop me doing the following

Only the T&Cs for P Bonds.

patientperson

dominoman wrote: »

I have around 10k in a Santander 123 account that gives me a nice 3% interest per year. Interest is calculated daily.

Is there anything to stop me doing the following:
1. Withdraw my full 10k and buy premium bonds on the last day of the month.
2. Two days later, after the draw, take out all the money from premium bonds and put it back into Santander.
3. Repeat each month.

That way I get 28 out of every 30 days interest at Santander, and I also get premium bonds in every draw.

Now I know it sounds like hassle, and allowing time for money to clear might eat into it a little, but has anyone tried this? Is anything stopping it from working.

A cunning plan .. but .. the major flaw is that the £10,000 does not enter the draw until after a full month after purchase has passed.

The leaflet I have .. 'When the Bonds go into the Draw' .. T&C 01-06-2015.

Your bonds become eligible to take part in prize draws once you have held them for a full calendar month following the month you bought them.

dominoman

Ah ha! Thanks for the info.

Plan foiled.

Kernel_Sanders

dominoman wrote: »

Ah ha! Thanks for the info.

Plan foiled.

PSBs have been going for decades. Even if the original T&Cs were left to the teaboy to devise and the ploy was possible when first launched, don't you think such an obvious gaff would have been plugged within days? Or do you think that you are the first person out of many millions who have bought these bonds to have thought of it?

dominoman

Kernel_Sanders wrote: »

PSBs have been going for decades. Even if the original T&Cs were left to the teaboy to devise and the ploy was possible when first launched, don't you think such an obvious gaff would have been plugged within days? Or do you think that you are the first person out of many millions who have bought these bonds to have thought of it?

That's a very critical answer. You obviously take exception to my question.

TheTracker

There are still and always will be arbitrage opportunities in different places. Matched betting continues to thrive. A year or two ago it was relatively easy to earn a buck flipping Bitcoin between two exchanges with different rates. And currently people are doing some clever things with "mispriced" p2p loan parts. Stoozing was the game of old. At the far end of the scale there is even a plan to float a barge midway across the Atlantic between New York and London to take high frequency trading to the extreme. So I'd keep thinking if I was you. Back on subject, some people overpay certain bills each month eg certain energy providers pay 3% on balances, and Santander give you 2% cash back on the total, at least for me it's anoth £70/year bonus.

Pincher

Have you heard about the trick of keep doubling your bet until you make your £1 back?

Funny how you keep making £1, but lose £256 when you chicken out.