Is NS&I really worth investing with?

RhondaD

I've had £4,000 in premium bonds for a while but I'm starting to think I would get better returns elsewhere. In the last 15 months I've won absolutely nothing. Zilch. Every single month, nothing. I feel I've wasted 15 whole months which even in a savings account would have earned me more. It just seems pointless investing in premium bonds. They don't seem to win anything. I've even asked them if it's usual to not even win a fiver in 15 months and they just gave the usual guff about how every bond has the same chance of winning blah blah blah, but It seems like the 5,000 bonds I bought don't have any chance of winning.

twadds123

Here is this websites analysis of them

https://www.moneysavingexpert.com/savings/premium-bonds/

In short, you need to be above average luck to beat what you could get in savings

refluxer

If you want to win anywhere near the 3% advertised prize fund figure, you'll need a lot more saved in premium bonds then £4k. If I was you, I would cash them in now and choose a savings account where the returns are guaranteed.

RhondaD

Thank you so much for this. I think you are right and I should cash them in. I think a savings account would be better really. Even if I'd just gained a few pounds interest over 15 months it still will have been more than NS&I. In fact I wish I had known I wasn't going to get a single win because I would have cashed them in months ago.

cymruchris

RhondaD said:

Thank you so much for this. I think you are right and I should cash them in. I think a savings account would be better really. Even if I'd just gained a few pounds interest over 15 months it still will have been more than NS&I. In fact I wish I had known I wasn't going to get a single win because I would have cashed them in months ago.

But had you won a million you'd have been over the moon I guess?

Premium bonds are more like a lottery than an investment - other than the fact you never lose your initial stake. 

In a savings account you'll get a guaranteed X percent per annum - but there'll never be a surprise or chance of winning anything big. It depends on your priorities. 

Guaranteed return - savings account.

Minuscule chance of a big win, and possibly the odd little win along the way, but nothing guaranteed - premium bonds.

eskbanker

RhondaD said:

I've had £4,000 in premium bonds for a while but I'm starting to think I would get better returns elsewhere. In the last 15 months I've won absolutely nothing. Zilch. Every single month, nothing. I feel I've wasted 15 whole months which even in a savings account would have earned me more. It just seems pointless investing in premium bonds. They don't seem to win anything. I've even asked them if it's usual to not even win a fiver in 15 months and they just gave the usual guff about how every bond has the same chance of winning blah blah blah, but It seems like the 5,000 bonds I bought don't have any chance of winning.

https://www.moneysavingexpert.com/savings/premium-bonds-calculator/ gives an illustration of expected returns with average luck, and, based on the odds applying as at December 2022 draw (i.e. before the rise to a nominal 3%), your expected return would have been £75 over a year, but there's also a far from insignificant 13.5% chance of winning nothing during that time.  There's a 0% chance of winning a fiver as such

They're certainly not for everyone, but anyone buying into premium bonds should acquaint themselves with the basics about likely outcomes before committing....

frugalmacdugal

Hi,

might as well hold just now until the January draw, then decide.

Good luck.

annabanana82

RhondaD said:

I've had £4,000 in premium bonds for a while but I'm starting to think I would get better returns elsewhere. In the last 15 months I've won absolutely nothing. Zilch. Every single month, nothing. I feel I've wasted 15 whole months which even in a savings account would have earned me more. It just seems pointless investing in premium bonds. They don't seem to win anything. I've even asked them if it's usual to not even win a fiver in 15 months and they just gave the usual guff about how every bond has the same chance of winning blah blah blah, but It seems like the 5,000 bonds I bought don't have any chance of winning.

It would be highly unusual to have won a fiver in the last 15 months given the minimum prize is £25. 

Stubod

I would not bother with PB's unless you save the maximum amount allowed, (or close to it). For anything less I would just use the best savings account I could find?

Albermarle

RhondaD said:

I've had £4,000 in premium bonds for a while but I'm starting to think I would get better returns elsewhere. In the last 15 months I've won absolutely nothing. Zilch. Every single month, nothing. I feel I've wasted 15 whole months which even in a savings account would have earned me more. It just seems pointless investing in premium bonds. They don't seem to win anything. I've even asked them if it's usual to not even win a fiver in 15 months and they just gave the usual guff about how every bond has the same chance of winning blah blah blah, but It seems like the 5,000 bonds I bought don't have any chance of winning.

The issue is that someone else with £4K of premium bonds, will have had more prizes than they expected. So there is nothing fundamentally wrong with Premium Bonds, you have just been a bit unlucky. If you held on to them for long enough, your luck would even out.

davidr1964

I bought £4.5k's worth of PB's in late 2021 and won £5k earlier this year, so you just never know!