£1000 - Premium Bonds or savings account?

Netherspark

I have £1000 that I could safely shift out of my current account and my initial thought was Premium Bonds, or I could put it into a 5% savings account which would get me £50 after a year.

Is Premium Bonds actually going to be worth it at £1000, would it at least win me £50 a year?

Rodders53

Netherspark wrote: »

I have £1000 that I could safely shift out of my current account and my initial thought was Premium Bonds, or I could put it into a 5% savings account which would get me £50 after a year.

Is Premium Bonds actually going to be worth it at £1000, would it at least win me £50 a year?

Read the very clear article spelling out the odds of not winning on Premium Bonds.:money:

On average all in the gamble net under 1.5% pa. You can get a guaranteed 5% pa (where?)... :T

You feeling lucky, punk?

AnotherJoe

It pays somewhat less than 1.3% so on average it would pay you £13, but since you cant get an average, odds are roughly 50/50 you'll get nothing or £25.

Biggus_Dickus

Netherspark wrote: »

I have £1000 that I could safely shift out of my current account and my initial thought was Premium Bonds, or I could put it into a 5% savings account which would get me £50 after a year.

Is Premium Bonds actually going to be worth it at £1000, would it at least win me £50 a year?

Unlikely ,... but who knows!...:j

Have a fiddle around with the MSE Premium Bond calculator.

https://www.moneysavingexpert.com/savings/premium-bonds-calculator/

Stubod

For smaller amounts it is "probably" not worth putting the money into PB's as statistically you may not get any returns for months / years. If it were me I would go with the best interest savings account I could find. But thats just me...

Berkshire_Beancounter

For that amount of money, my inclination would be a savings account rather than premium bonds, although maybe my judgement is clouded by having what I feel was worse than average luck on larger holdings of premium bonds over the years.

I too would like to know where you can get a 5% savings account . Or were you thinking of a regular savings account, which some banks offer, but usually with limited amounts that you can invest and on a monthly basis? If it's a regular saver with a monthly limit on what you can invest, then the average interest would be around half of the £50 as you haven't invested the full £1,000 for a full year.

Good for you in thinking on how to save it though, rather than leaving it in your current account where the propensity to spend it might be greater.

Netherspark

Berkshire_Beancounter wrote: »

I too would like to know where you can get a 5% savings account . Or were you thinking of a regular savings account, which some banks offer, but usually with limited amounts that you can invest and on a monthly basis? If it's a regular saver with a monthly limit on what you can invest, then the average interest would be around half of the £50 as you haven't invested the full £1,000 for a full year..

It's the 'Nationwide Flex Regular Saver', and yes now that you mention it I see you can pay in a max of £250 per month. So yeah it would take 4 months to pay it all in.

jimjames

Rodders53 wrote: »

On average all in the gamble net under 1.5% pa. You can get a guaranteed 5% pa (where?)... :T

A few places, Nationwide being one where you can get 5% on £2500. You can also use regular savers paying 5% too. Other accounts pay 3%

Berkshire_Beancounter wrote: »

I too would like to know where you can get a 5% savings account .

Surprised that someone on MSE for so long hasn't seen anything about 5% accounts, they've been available for a long time but are fading out a bit now. The links are at the top of the homepage.