Premium Bond rate boosted from 1.15% to 1.4% – should you pile in?

chamelion

REJP wrote: »

Why are people complaining that they have one bond and never won a prize? Have they not realised that they only have a one in seventy BILLION chance of winning?
By saving money directly from my bank account over many years, and by re-investing all wins under £5000 , I have managed to build a total of £30,000. Since April this year I have received 11 prizes of £25, one of £50, and one of £100.
Last month the single £1 bond given to me as a wedding present in 1957, one of the first issued, won £25. So older bonds do sometimes win.
Good luck to everyone, hope you have a great win.

That's £115 less than you'd have made on a 3% account even after paying a higher rate tax.

So far all the 'success' stories I'm seeing in this thread indicate people are making less than if they had a few savings / checkings / regular savings accounts.

phillw

qwert_yuiop wrote: »

Here’s something to think about ( for 2 seconds). Which is more likely to win the lottery - 1,2,3,4,5,6 or a random selection?

We can't know that as they have multiple sets of balls and machines to stop people figuring out if there is a discernible pattern and exploiting it. However 1,2,3,4,5,6 is a very bad choice of numbers because you'd be sharing the jack pot with ten thousand other people.

I would love to have enough money to max out premium bonds and be happy with the safe return you get from them (which means you must have enough money elsewhere too).

chamelion wrote: »

So far all the 'success' stories I'm seeing in this thread indicate people are making less than if they had a few savings / checkings / regular savings accounts.

It would take more than a "few" accounts to spread out that £50k. It's not like the old days when you could dump 20k in santander for 3%.

qwert_yuiop

chamelion wrote: »

So you've received £100 on a £7000 investment?

Let's say you got it into some 3% accounts. That's £210. If you're a higher rate tax payer, that's £126.

Basically you need to win at least once more to make as much as you'd make on a 3% account.

Is it really worth it?

Well of course it’s not, but the point is you might win big, even if it’s just £500, which would make all the difference. It’s portrayed as a sort of risk free gambling, but it’s not your capital you’re gambling with, it’s the interest on your capital, which is effectively being used to buy lottery tickets.

chamelion

phillw wrote: »

It would take more than a "few" accounts to spread out that £50k. It's not like the old days when you could dump 20k in santander for 3%.

OK, that's fair, if you don't want the hassle of multiple bank accounts.

I've been trying to find a good stash for cash and am evaluating bonds, but just not convinced yet. For e.g. - I could be overpaying mortgage, which has a higher interest rate than the 1.4% i'd get here. Or, I could put more funds into my stocks + shares ISA which I'm currently at +2% since March.

Sure, I could "win big" but that's just not a sufficiently rational reason to go down this route.

qwert_yuiop

phillw wrote: »

We can't know that as they have multiple sets of balls and machines to stop people figuring out if there is a discernible pattern and exploiting it. However 1,2,3,4,5,6 is a very bad choice of numbers because you'd be sharing the jack pot with ten thousand other people.
.

If there is a discernible pattern, it’s not random, and the whole thing’s a fraud. If it is truly random, 1,2,3,4,5,6 is no less likely to win than any other pattern (or no more likely).

mindwave

Martin, you asked us to let you know our PB winnings. I have mine for the past few years in a spreadsheet, if you would like to see this, please let me know how I can email it securely to you.

chamelion

mindwave wrote: »

Martin, you asked us to let you know our PB winnings. I have mine for the past few years in a spreadsheet, if you would like to see this, please let me know how I can email it securely to you.

would you mind sharing high level figures? return % on what investment?

Rishtonite

Since July 2013 I've been using a spreadsheet to calculate my % "interest"
It has varied from 1% to 2.375% with an average of 1.569%
That's an average of just over £300/year, which pays for my car insurance :-)
Maybe I could do slightly better with a high interest account, but I like the "lottery factor" that one of these days I might have a big (£1000 or more) win.
And unlike the National Lottery I'm not actually spending money to get modest winnings.

qwert_yuiop

Rishtonite wrote: »

Maybe I could do slightly better with a high interest account, but I like the "lottery factor" that one of these days I might have a big (£1000 or more) win.
And unlike the National Lottery I'm not actually spending money to get modest winnings.

What you’re effectively spending is the interest you would have got if you’d put your money in a high interest account. That’s the way it works - if you don’t win, youve lost your stake.
Another way to achieve the same result would be to put your money in a high interest account and use the interest paid to buy lottery tickets.
I prefer to use the interest earned to gamble on sure fire winners like Hillary Clinton and Remain, or something.

Rishtonite

What's the average "interest" on Lotto tickets?
If I "invested" my £300 PB "interest" in Lotto tickets, how much am I likely to win?
My guess is not very much, so I'd rather opt for the PB winnings and use those winnings for something useful, than buying lottery tickets.