Premium bonds for emergency fund?

mooneysaver

Premium bonds do not actually return the advertised coupon rate to most investors due to the £1m prize skewing the average. For most people's emergency fund investing a low-risk stock such as ROO using a low or zero fee broker will give a reasonable balance between risk and return.

eskbanker

mooneysaver said:

For most people's emergency fund investing a low-risk stock such as ROO using a low or zero fee broker will give a reasonable balance between risk and return.

Haha, good one!

aroominyork

onthebench said:

I think PBs are pretty much as good a place as any to keep some "emergency money", unless emergency means "Must have the cash this second." As others have said, you can access the funds within a few days, and although there is no fixed interest rate, if you have a reasonable amount in there (say at least £15k-£20k) then you will probably overcome the randomness and win close to the expected amount each year, which compares pretty well to other savings accounts.

With £34,500 invested, you "should" with average luck win a prize each month (and if you do then it will almost certainly be £25), meaning you win £300 a year, or 0.87%.

My view entirely. I've just moved a chunk of emergency funds into PBs. The more you own, the more likely you are to get the 'expected' return.