Nottingham Building Society - 1.55% Instant Access Account

jrsga

londoninvestor wrote: »

Yep. Strictly, the chance of winning £1m at least once in a year is:

1 - (probability of NOT winning £1m in the year)
= 1 - (probability of NOT winning £1m in 12 independent draws)
= 1 - (1-n)^12 , where n is the chance of winning £1m in each draw
= 12n + 66n^2 + terms in n^3 and above

If n=1/767,747 then:

12n = 0.00001563015 = 1/63,979
66n^2 = 0.000000000111972: which makes almost no difference
...and the higher-order terms are even more negligible still.

thank you :j

jrsga

IanManc wrote: »

Of course Premium Bonds are gambling. It is a state run lottery.

And your stake isn't your capital. Your stake, which you are gambling with, is the notional interest on the prize fund. You are gambling with that, in the hope that "with luck" your returns will exceed it, but the gamble is that you may get nothing and lose the notional interest entirely or get less than it in "prizes".

Your stake cannot be the capital you invest. A "stake" is the money you gamble with and which you are at risk of losing. You are not risking the money with which you buy the bonds and cannot lose it, so it can't be a "stake" as it isn't at stake in the lottery.

Of course its not - my stake is my deposit which is perfectly safe. Its not gambling.

Biggus_Dickus

jrsga wrote: »

This is all a bit silly chasing rate increases like this is it not.



Surely I may as well put 50k in premium bonds and have a 1 in 60000 of winning a million quid?

colsten wrote: »

Your decision. If you like a gamble, you can do just that. If you like to have a given interest rate, you would more likely choose a savings account.

Not sure about your chances of winning a million.

EDIT: In fact, you are WAY out. https://www.moneysavingexpert.com/savings/premium-bonds/#tips-1

My brother and I had Premium Bonds for many decades. They were purchased by our parents when we were children.

Our mother died recently and the premium bonds were actually still registered at her address.

They were officially reallocated to my brother and I along with a statement that showed how much ‘winnings’ they’d generated over the years;

The ‘interest rate’ (for want of a better phrase) was absolutely pitiful;... a million miles away from the much vaunted theoretical 1.4%

Perhaps we’ve just been unlucky.

Fed up with being ripped-off by Ernie, we both decided to cash-in the Premium bonds and invest the money in a sure-fire winner. It’s a new venture called ‘The Nigerian National Gold Mining Corporation’

Kerching!... we’ve been assured the cash will soon be rolling in;

...Ernie,... eat your heart out. :money:

Inner_Zone

darren72 wrote: »

Funds are just showing now at 16:50 - So just over an hour.

Opened the account yesterday, did a transfer from M&S Bank this morning, took three hours for the FP to show!

Motormad

I see this account has been pulled already,I presume you can still add funds as long as it was opened on time

AnotherJoe

Biggus_Dickus wrote: »

The ‘interest rate’ (for want of a better phrase) was absolutely pitiful;... a million miles away from the much vaunted theoretical 1.4%

Perhaps we’ve just been unlucky.

No, you've been a victim of statistics. :eek:
(I'm assuming here that your parents didn't buy you and your brother £50k's worth or similar, but a low amount)

The thing about PB's is that whilst they return a theoretical rate across the pool of bonds, its across the pool not for each holder.

The minimum prize is £25. If you have just one bond, each year that bond is either going to win the £25 (or higher) or zero. Those are the two alternatives. And obviously zero is more likely than £25+ The bond would need to be invested for more thana lifetime to approximate 1.4%

So with a low number of bonds you are almost certain to see either a very low rate of return (as you did) , or a very high one, just because there's nothing in between. Its only as you get to the £50k limit that you would tend to approximate the average payout and even that is skewed downwards since part of it is very very high prizes, eg the One £million, and so unless you win one of those (microscopic odds) you are [STRIKE]certain[/STRIKE] more likely to be below 1.4.

xylophone

bank = nat west

Have you ever had a Nationwide Flexdirect current account? (£2500).

If not you might consider a switch ( if you know an existing NW customer).

Or if you don't want to switch just open the account.

You might also open a TSB Plus current account. (£1500)

If you opened both, you could set a same day (mid month is best) SO for £1000 from NW to TSB and TSB to NW.

Put the remaining £1000 into the best rate savings account and transfer it as quickly as possible into the Nationwide Flex monthly saver together with the interest generated on the two current accounts.

At the end of your year with the NW current account consider your options.

eskbanker

AnotherJoe wrote: »

Its only as you get to the £50k limit that you would tend to approximate the average payout and even that is skewed downwards since part of it is very very high prizes, eg the One £million, and so unless you win one of those (microscopic odds) you are certain to be below 1.4.

I agree with all of your post except 'certain' - it's entirely possible to achieve a return of greater than 1.4% without winning one of the very very high prizes!

With the random draws there are very few certainties with PBs, other than that those who achieve below-average returns will feel the need to use terms like 'ripped off'....

AnotherJoe

eskbanker wrote: »

I agree with all of your post except 'certain' - it's entirely possible to achieve a return of greater than 1.4% without winning one of the very very high prizes!

With the random draws there are very few certainties with PBs, other than that those who achieve below-average returns will feel the need to use terms like 'ripped off'....

Good point well made, I should have put "more likely" or similar and ive updated my post

Biggus_Dickus

eskbanker wrote: »

I agree with all of your post except 'certain' - it's entirely possible to achieve a return of greater than 1.4% without winning one of the very very high prizes!

With the random draws there are very few certainties with PBs, other than that those who achieve below-average returns will feel the need to use terms like 'ripped off'....

Sorry;...’ripped-off’ was inappropriate;

...’robbed blind’ is probably more accurate.