The Top Easy Access Savings Discussion Area

gussie5555

Stargunner said:

gussie5555 said:

jak22 said:

With a lot of good options over 3.6% and ISAs not far behind that, plus fixes around 5%, Premium Bonds are looking poor now at maybe 2.8% effective

Yep - will wait for the June draw and unless I win a high value prize which I never have in the last 3 years, my 50k will find a home in a 5% fixed 12 month account - you have to be pretty stupid to let 50K languish in Premium Bonds now, unless you are of a gambling mind!

Premium bonds are still attractive for higher rate tax payers that are not stupid or gamblers. They also allow you easy access to your money should you need it.

Even if you pay 45% tax you would still have to be very lucky to earn more than 2% on 50k in Premium Bonds whereas current best easy access rates match and will soon exceed that. I really believe many folks are loosing a lot by staying in Premium Bonds at the current elevated rates of interest - but there will always be corner cases like the million pound winners !

cwep2

gussie5555 said:

Even if you pay 45% tax you would still have to be very lucky to earn more than 2% on 50k in Premium Bonds whereas current best easy access rates match and will soon exceed that. I really believe many folks are loosing a lot by staying in Premium Bonds at the current elevated rates of interest - but there will always be corner cases like the million pound winners !

From the MSE's own analysis:
£50k of premium bonds has a median return of £1275 (2.55%, which for a 40% tax payer is equivalent to 4.25% gross).
You also have an 89.6% probability of winning £1000 or more - which would be 2%, so saying you would have to be very lucky to earn more than 2% is not really correct.

Certainly at current rates, for anyone except 40% or higher tax payers I don't think PBs are a good investment if you are happy with putting your money into places like Chip or Tandem, but for those that are in that bracket, which is an increasing number of people, then it is still something to consider. 

mebu60

gussie5555 said:

Stargunner said:

gussie5555 said:

jak22 said:

With a lot of good options over 3.6% and ISAs not far behind that, plus fixes around 5%, Premium Bonds are looking poor now at maybe 2.8% effective

Yep - will wait for the June draw and unless I win a high value prize which I never have in the last 3 years, my 50k will find a home in a 5% fixed 12 month account - you have to be pretty stupid to let 50K languish in Premium Bonds now, unless you are of a gambling mind!

Premium bonds are still attractive for higher rate tax payers that are not stupid or gamblers. They also allow you easy access to your money should you need it.

Even if you pay 45% tax you would still have to be very lucky to earn more than 2% on 50k in Premium Bonds whereas current best easy access rates match and will soon exceed that. I really believe many folks are loosing a lot by staying in Premium Bonds at the current elevated rates of interest - but there will always be corner cases like the million pound winners !

The harder I do my calculations the luckier I get then it would seem. In the five months YTD I have collected £900 in prizes so 1.8% in the bank already and over half the year still to go. The quoted average is currently 3.3% so a realistic expectation would be around 3% after removing jackpot winners. I'm well on track to achieve that. I've achieved the quoted average or very close to for the past three years, the year before that way above thanks to a £1k win. In a small sample size of me, my brother, my ex-wife and her husband we all seem to be around the average payout rate so I would say that currently you would have to be very unlucky not to earn more than 2% on £50k. But then I'm pretty stupid. 

eskbanker

mebu60 said:
The quoted average is currently 3.3% so a realistic expectation would be around 3% after removing jackpot winners. I'm well on track to achieve that.

It used to be the case that the small number of high value prizes represented 10% of the prize pot, but that changed to 20% last year, so the realistic 'average luck' expectation is now more like 80% of the nominal rate rather than the 90% it used to be.

However, extensive discussion about premium bonds is probably better kept confined to the numerous threads about them, rather than clogging this one up!

subjecttocontract

Premium bonds are easy access.....that's one of their valuable attributes, so discussion IS in the right place. It's a forum to discuss exactly that !

S_uk

I wonder if NS&I will announce an increase in the PB prize rate before the end of the week, in time for the June draw. Maybe wishful thinking on my part. 

alternate

Problem is that a lot of people went in to premium bonds on the back of tax rises, all the mainstream press were talking them up.  Unless people start cashing them in, there might be no incentive for rises.

Justsayit7

Cynergy Bank NOW 3.71%

SeriousHoax

Justsayit7 said:

Cynergy Bank NOW 3.71%

Thanks Just done "fast-track" and now showing 3.71%

Marmaduke123

Justsayit7 said:

Cynergy Bank NOW 3.71%

Thanks. Just transferred a load of money there from Santander. Now to open a new account and transfer it all over to the latest edition! I shall then have 3 closed accounts, and I've only been with them a short while. I wish they wouldn't do it this way!