Nationwide Start To Save Account

colsten

A new, gimmicky, micky-mouse pseudo-competitor to Premium Bonds, and to the Prize Saver accounts from the Credit Unions.
Still, if you are happy to put some of your money into a 1% account for a chance to win £100 4 times a year, this might be of interest. You can deposit a maximum of £100 a month, and your month-end balance must have risen by at least £50 in each of the 3 consecutive months before each of the quarterly draws to be entered into the draws.
https://www.nationwide.co.uk/products/savings/start-to-save/features-and-benefits

ctdctd

So, to maximise your chances of winning and minimise your cash tied up at 1%, it looks like:-

Open with £50 in April 2020

Pay in £50 a month until the end of April 2021 to get entry to the four prize draws

Withdraw all your cash with 1% interest and all the £100 prizes you may, or may not, win!

(Keep account open until the end of May 2021 if you win in the April 2021 draw)

colsten

That's roughly it, yes. For basically a £2 punt, you have a chance to win anything between £0 and £400. Nationwide say: Depending on how big the prize fund is, your chance of winning is between 1/34 and 1/67.

Yellowvest23

So realistically your spending £2 on something like a 50/1 shot to win £100 so absolutely no point in doing . even if their odds can be believed.Better off going to a market operating at 100% on a  betting exchange and placing your two quid on a 50/1 and save the two years of faffing about if you really do want to gamble £2.
Who on earth would spend the time and trouble setting everything  up?
Pure gimmick,and exactly what you would expect from Nationwide who`s only concern is keeping their fat cat millionaire directors in their life of luxury.

millwalls

So if my partner an I were to open 2 accounts and do the minimum as outlined above, if the probability of winning in a draw is 1/67, what is the total probability of one of us winning one of the 4 prize draws?

Rudyson

millwalls said:

So if my partner an I were to open 2 accounts and do the minimum as outlined above, if the probability of winning in a draw is 1/67, what is the total probability of one of us winning one of the 4 prize draws?

On those figures, you'd have an 11.34% chance of winning at least once.

Tim11111000111

I think it's a good value account. j.p's post makes it quite clear that the total "prize fund rate" is significantly higher than most people can get through normal savings accounts. It's worth reading through the MSE Premium Bonds page - a lot of the logic is the same, but the Start To Save has a much higher prize rate AND a guaranteed interest rate. I note that the Premium Bonds page focuses on Median averages, where as in my calculations below I am looking at the Mean. The Median probably makes more sense for Premium Bonds where each £1 bond has a (small) probability of winning and most people have £000's (most people will win something over the course of a year). The Mean makes more sense as a hard nosed gambler - is this a good bet?

The total chances of winning is simple to work out as a binomial probability. The worst case scenario, if your chance of winning in each draw is 1 in 67, then across all four draws you have ~5.6% chance of winning once, ~0.13% chance of winning twice, ~0.001% chance of winning three times and a negligible chance of winning all four times. The "expected outcome" is therefore a winning of ~£5.9, minus the opportunity cost of ~£2 in lost interest versus the best easy access saver. The "average" person therefore wins ~£3.9 versus using the best easy access savings account. Most people (~94%) won't win anything, but as a gamble it's a mathematically good bet.

If everyone paid in £100 each month, it would actually be even better value (1 in 34 chance of winning per draw; expected outcome is winning ~£11.7, against a cost of ~£4 in lost interest). However, a little bit of game theory suggests this is not a viable strategy. If everyone saved £100 per month, then any individual could "cheat" and save only £50, thereby minimising their cost whilst benefiting from the larger prize fund (and noting everyone who qualifies gets an equal chance of winning, cf. Premium Bonds where your chance increases with the more you have saved).

(all calculations may have some rounding errors)

crumpet_man

Did anyone in here win £100?

ctdctd

Nope - I've had to cancel the celebration party.

colsten

Nowt for me, apart from an email from Nationwide to say I won nowt.

JonnyMK

no win here despite having the account since it started in February. I'm going to see what the prize draw in October (2 months time) reveals, if still no win I don't see the point when I can get 1.16% with NS&I. Nationwide pretend to be "on your side" but during this lockdown their loyal members have been shafted to maintain high profits.