Where should I put my rainy day/emergency fund?

grumiofoundation

howard3844 said:

In theory you should win on average 1% pa, therefore about 15 pa x 10 = £150. Saying that I think it is schewed to big prizes so I'd say the normal person would be lucky to get £50 over 10 years ??

The 'rates' have not been 1% for the last ten years.

The minimum prize is £25 so there is no way for you to win £15 per year. 

If you have £1,500 in premium bonds, what you will 'expect' to win with average luck over a year at an 'average' rate of 1% is  .... £0.

eskbanker

grumiofoundation said:

howard3844 said:

In theory you should win on average 1% pa, therefore about 15 pa x 10 = £150. Saying that I think it is schewed to big prizes so I'd say the normal person would be lucky to get £50 over 10 years ??

The 'rates' have not been 1% for the last ten years.

The minimum prize is £25 so there is no way for you to win £15 per year. 

If you have £1,500 in premium bonds, what you will 'expect' to win with average luck over a year at an 'average' rate of 1% is  .... £0.

But over a ten year period you'd expect the averaging to take effect to give £25 wins in six of those years, if the median rate was 1%, so the average luck expectation would still be £150, even though it would be 6 x £25 rather than 10 x £15 - the actual rate is currently more like 0.9% but it was over 3% for some of the period concerned (2002-2012)....

Albermarle

Saying that I think it is schewed to big prizes 

It is to some extent but not to the level you are indicating .

The official return rate is 1% but it is better described as 0.8/0.9% plus an infinitesimal chance of winning a Million.