£1000 pm

eskbanker

Flobberchops wrote: »

The benefits of Premium Bonds are that they're government-backed, fairly liquid, and average a return of 1.4% with a chance to win £1million. Think of it as low-stakes gambling where you can get your stake back at any time.

I wouldn't buy JUST Premium Bonds but they would form a low risk part of your portfolio. You can buy them in chunks of £100.

Perhaps worth adding the usual caveats about Premium Bonds, i.e. that the typical return (median rather than mean) is closer to 1.2% rather than 1.4% because of the prevalence of low-value prizes, and that the lumpy nature of the return (when the minimum prize is £25) means that small holdings suffer as a result of this.

Hence the (median) average return on a holding of £1,000 for a year is zero, but holding £12K for a year would return £150 with average luck.

ValiantSon

Flobberchops wrote: »

The benefits of Premium Bonds are that they're government-backed, fairly liquid, and average a return of 1.4% with a chance to win £1million. Think of it as low-stakes gambling where you can get your stake back at any time.



I wouldn't buy JUST Premium Bonds but they would form a low risk part of your portfolio. You can buy them in chunks of £100.

For someone looking for the best return on £1,000 a month they are a poor option. The "government backing" is irrelevant, as any cash account is protected up to £85,000. The 1.4% return is entirely notional.

If the OP doesn't want to invest for the long term (and if they do then they should consider multi asset funds in an S&S ISA) then regular savers and current accounts are, at present the best vehicles.

Terry_Towelling

A few people have mentioned regular savers. Virgin don't do the best rate for theirs (2.25%) and you can't go above £250/month, but they do currently bring out a new issue every couple of months, so you can actually have about 7 running at any one time. They are easy access and can last for up to 14 months per issue - we're in issue 11 at the moment.

Using such regular savers is a balancing act depending on whether you are recycling savings that you already hold elsewhere or whether you are filling them up with newly-acquired income each month.

E.G. you have £3K in an easy access account paying 1.45% (Bham Midshires - not available any more) and you take out £250 each month to put in your Virgin Reg Saver (2.25%). The interest you get on the reducing balance in your easy access plus the interest from the increasing reg saver adds up to about the same as if you put the whole £3K into a 12-month fixed rate account at about 1.85%. The maths varies according to the rates on your accounts (obviously).

Downside to a Fixed rate is you can't get at your cash if you need it.