The Real Return on Premium Bonds

Archi_Bald

HappyMJ wrote: »

Yes...premium bonds are terrible.

That is true for most people but they are a sensible place for some of some people's money.

dunstonh wrote: »

I don't like Premium Bonds. However, for higher rate taxpayers who have used their ISA allowances, pension allowance, capital gains tax allowance etc, then Premium Bonds can then be an attractive option.

That would be me. I use cash in PBs and good current accounts as part of a balanced portfolio. I don't any longer have 20 or 30 years in which to ride out market swings.

polymaff

Stompa wrote: »

I still find the 'Prize distribution' table here:

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

somewhat misleading. You would think that the 'ODDS OF WINNING PER £1 BOND' column would show the odds of winning the particular prize in the corresponding 'PRIZE LEVEL' column. In fact, it shows the odds of winning 'PRIZE LEVEL' or greater.

Hmmm! So both MSE items may be wrong!

Looking at the NS&I site, it looks like the effective interest rate on a combination of the £100, £50 and £25 prizes is currently 1.188% - suggesting that my 1.15+% figure based on the MSE table of £25 data might validate the data you are criticising.

Anyway 1.188%, meaning 1.485% to a basic rate or 1.98% for a higher rate tax-payer.

Thanks for replying on-topic

polymaff

Archi_Bald wrote: »

That is true for most people but they are a sensible place for some of some people's money.

That would be me. I use cash in PBs and good current accounts as part of a balanced portfolio. I don't any longer have 20 or 30 years in which to ride out market swings.

Spot on!

So there's at least two of us