Premium bonds and negative interest rates

MrMoore

If interest rates go negative are Premium Bonds really a safe haven?

 Would the prize fund be reduced zero? Even worse would I have to pay ERNIE if I won. Imagine if the top prize was -£1,000,000

eskbanker

Strange post - hopefully not serious but not exactly rib-ticklingly humorous either....

moneysavinghero

MrMoore said:

If interest rates go negative are Premium Bonds really a safe haven?

 Would the prize fund be reduced zero? Even worse would I have to pay ERNIE if I won. Imagine if the top prize was -£1,000,000

Then you would just withdraw your money and put it elsewhere. Not that it is going to happen anyway

MrMoore

moneysavinghero said:

MrMoore said:

If interest rates go negative are Premium Bonds really a safe haven?

 Would the prize fund be reduced zero? Even worse would I have to pay ERNIE if I won. Imagine if the top prize was -£1,000,000

Then you would just withdraw your money and put it elsewhere. Not that it is going to happen anyway

Lets hope it would not be too late!

MrMoore

eskbanker said:

Strange post - hopefully not serious but not exactly rib-ticklingly humorous either....

Lets hope so!

MrMoore

Japan and some European countries are are already on negative rates. Maybe they have done a strange thing.

I must admit its scary but possible for the UK rates to do the same. Mexico are on 6.15% still though.

eskbanker

Oh dear, looks like you might have been serious after all!

It's far from certain that we'll see a negative central bank base rate, but even if we do, it doesn't mean that savings rates would follow, and even if savings rates were to be negative, that doesn't mean that they'd be followed by a product whose entire USP is a prize draw.

Re "Lets hope it would not be too late", worth bearing in mind that NS&I gave over two months' notice of a modest reduction in prize rate last year, so the notion that holders wouldn't have time to react, in the vanishingly-unlikely event that NS&I took the nuclear option, is fanciful to say the least....

MrMoore

eskbanker said:

Oh dear, looks like you might have been serious after all!

It's far from certain that we'll see a negative central bank base rate, but even if we do, it doesn't mean that savings rates would follow, and even if savings rates were to be negative, that doesn't mean that they'd be followed by a product whose entire USP is a prize draw.

Re "Lets hope it would not be too late", worth bearing in mind that NS&I gave over two months' notice of a modest reduction in prize rate last year, so the notion that holders wouldn't have time to react, in the vanishingly-unlikely event that NS&I took the nuclear option, is fanciful to say the least....

An intersting opinion!

MrMoore

Hope you don't miss the notification of the changes of Premium Bonds if it happens

 

Whilst far from certain as I have already told you it is not impossible.

You could always gamble your negative interest or prize of negative £1M on the lottery as they are not based on interest rates for the prize fund.

The other thing is that property prices will go through the roof in my opinion as a reult of negative interest rates rather than fall due to jobless as predicated previously for the 4th quaster of this year. Very fanciiful I agree if that is the right word for a disaster!

So you think Premuim Bonds are a safe haven then, well lets hope so as there is nowhere else to put your savings apart from property my learned friend.

Stubod

..I have just withdrawn all our money in PBs and converted it to Pesos just in case....I could not afford the risk of paying the government £1,000,000..

colsten

High time schools resume again.