What do you think of Premium Bonds?

subjecttocontract

lohr500 said:

DjangoUnchained said:

i started buying PBs about a year ago building up to the max £50k. won a handful of £25 and £50, a bit of fun. I treat them as my emergency fund, hoping i can cash them within a few days. I have an instant building soc account too for emergencies.

But £50k now would give you £1375 interest over a year with the best easy access savings account or easy access cash ISA. WithPB it is more of a gamble on what prize value you may get.

That's not necessarily correct. It depends on your tax position and your other taxable savings. Your £1375 in interest could easily be £825 after 40% tax. £825 income on £50k of premium bonds is 1.65% which is very achievable. The suitability of premium bonds is not a one size fits all.

soulsaver

subjecttocontract said:

lohr500 said:

DjangoUnchained said:

i started buying PBs about a year ago building up to the max £50k. won a handful of £25 and £50, a bit of fun. I treat them as my emergency fund, hoping i can cash them within a few days. I have an instant building soc account too for emergencies.

But £50k now would give you £1375 interest over a year with the best easy access savings account or easy access cash ISA. WithPB it is more of a gamble on what prize value you may get.

That's not necessarily correct. It depends on your tax position and your other taxable savings. Your £1375 in interest could easily be £825 after 40% tax. £825 income on £50k of premium bonds is 1.65% which is very achievable. The suitability of premium bonds is not a one size fits all.

Agreed.
However it also depends on the reasons you've got PBs in the first instance:.

If 'easy access' wasn't any part of your rationale, you'd maybe compare them with Fixed Term accounts and their higher rate.

I'm mulling the decision - I'm not getting near £2.0k pa from PBs but I could get that net in an FTB I've got yet unfunded.