£50k or 2 x £25k premium bonds?

tommyedinburgh

Following the sale of a property we are going to have £50,000 for between 6-12 months before we need it. 

It is definitely going into our premium bonds. Are we better buying £50k in one of our names or £25k in each of our accounts? Looking at it from a point of view if we have 50,000 consecutive bonds does this mean we might win more on average? 

eskbanker

tommyedinburgh said:

Following the sale of a property we are going to have £50,000 for between 6-12 months before we need it. 

It is definitely going into our premium bonds. Are we better buying £50k in one of our names or £25k in each of our accounts? Looking at it from a point of view if we have 50,000 consecutive bonds does this mean we might win more on average? 

No, one block of 50,000 bonds has exactly the same odds as two blocks of 25,000.

InvesterJones

No win difference, but having 50K in one means that winnings will have to be paid to an external account whereas the 2x25K can have winnings paid back into premium bonds and immediately eligible for the next draw.

MX5huggy

Yes 2 x 25 for the auto reinvestment of prizes.

RG2015

My wife and I both bought £10k worth in November 2020, so we have had 19 draws.

My wife has won £175 made up of 7 x £25, which works out at 1.10% p.a. average. Not sure if it is significant but last month she won two lots of £25. 

I have won £100 made up of 1 x £50 and 2 x £25, which is an average yield of 0.63% p.a.

Therefore, even of the odds are identical, the outcomes can be quite different.

If it's worth anything, it will be more fun with the two of you "competing".

I also find that it feels better to have the cash paid into our bank accounts rather the just reinvested.

And as a final thought, you would need to be sure that "Mrs Edinburgh" wouldn't run off with the £1 million. 

PS. You will need to buy before the end of May to qualify for the draw on 1st July. (Although I believe it will be on Monday 4th July because of the weekend)

Nebulous2

I also subscribe to the competition as a bit of fun theory. I like the reinvestment as well. We bought ours just over a year ago, and I’m well ahead, courtesy of a £1000 win.... 

RG2015

Nebulous2 said:

I also subscribe to the competition as a bit of fun theory. I like the reinvestment as well. We bought ours just over a year ago, and I’m well ahead, courtesy of a £1000 win.... 

Wow!

If that was me, I'd sell up.

What are the odds of that happening again?

Edit. What am I thinking, where is the fun in that?  

tommyedinburgh

We like the idea of competition so it will be £25k going into each. Let the fun begin ha ha. 

grumiofoundation

RG2015 said:

Nebulous2 said:

I also subscribe to the competition as a bit of fun theory. I like the reinvestment as well. We bought ours just over a year ago, and I’m well ahead, courtesy of a £1000 win.... 

Wow!

If that was me, I'd sell up.

What are the odds of that happening again?

Edit. What am I thinking, where is the fun in that?  

Assuming this is tongue in cheek but for anyone not actually sure premium bonds have no memory so odds are unchanged by past wins. 

Albermarle

My wife has won £175 made up of 7 x £25, which works out at 1.10% p.a. average. Not sure if it is significant but last month she won two lots of £25. 

It isn't 

Nebulous2 said:

I also subscribe to the competition as a bit of fun theory. I like the reinvestment as well. We bought ours just over a year ago, and I’m well ahead, courtesy of a £1000 win.... 

If I remember correctly someone with the full £50K will win a £1000 prize on average once in a lifetime, so you have been lucky!

What are the odds of that happening again?

As pointed out above, the chance of a prize in any draw is unaffected by what happened in previous draws.

RG2015

Albermarle said:

My wife has won £175 made up of 7 x £25, which works out at 1.10% p.a. average. Not sure if it is significant but last month she won two lots of £25. 

It isn't 

Nebulous2 said:

I also subscribe to the competition as a bit of fun theory. I like the reinvestment as well. We bought ours just over a year ago, and I’m well ahead, courtesy of a £1000 win.... 

If I remember correctly someone with the full £50K will win a £1000 prize on average once in a lifetime, so you have been lucky!

What are the odds of that happening again?

As pointed out above, the chance of a prize in any draw is unaffected by what happened in previous draws.

I know the true mathematical answer, but in my mind if feels like the chance of winning big more than once is less than chance of winning big only once.