Is NS&I really worth investing with?

Superscrooge

Thirty years ago I bought £100 of Premium Bonds (which was quite a lot in those days) and in the first year I won £50.

Wow, 50% return in a year. What a fantastic investment. Much better than any savings account.

I then had to wait 22 years before my next win!

  

 

Albermarle

lindos90 said:

Until recently I felt PBs were worth a punt, and certainly worth 'losing' the tiny amount of interest you would have earned from having the money in a savings account. But as I've seen interest rates rise over the last couple of years (A couple of years ago the base rate was 0.1%, Its now 3.5%) I've had second thoughts.

I have won a bit here and there over the last couple of years, but looking at the current levels of interest I could get by transferring it all to a savings account, I would need significantly more luck with PBs to beat it now.

Theres always the tantalising thought of a big win, but definitely making a decent amount every month in a savings account is becoming a more attractive proposition for me.

If you opened a savings account with one of Martins recommended ones Coventry BS, you could be getting around £130 interest a year. You would need significantly more than average luck with PBs to win more than that with £4000 worth of PBs.

The best equivalent easy access tax free savings account pays 3% ( although most pay 2.5% or less), which is identical to the new PB prize rate. Even if you discount the chance of winning a very big prize, the average return is around 2.5%.

Regarding the comment in bold, if you had average luck you would get a return around 2.5%, whether you had £4K or £40K in PB's . Having the smaller amount just increases your chances of getting less or more than 2.5%

Perksy5

Depends on what you want/need. Everyone's different. When £100 was the minimum investment in (2018?) I put that in, my first draw I won £500. Since then, I've only had a few £25s since. Then nothing for almost 2 years. I have about 5k in there now.
I'm 28, I'm not on a high salary by any means but I cba to chase savings account for the equivalent of £5-10 interest a month. If that's what makes you tick go for it.
Even though I haven't won in what feels like ages I'd much rather the chance of having a possible stab at a win even if its only a couple thousand.
Yeah my savings are being eroded by inflation but again I cba to chase a couple pounds of interest.
Do what's right for you. Judging your win history, or lack of, compared to others just seems to have cemented your choice of wanting to withdraw your savings anyway. Everyone's circumstances are different after all!

RhondaD

Well after 16 months of tumbleweed, today I won £50! lol 🤣

[Deleted User]

Hi,

RhondaD said:

Well after 16 months of tumbleweed, today I won £50! lol 🤣

good for you Ernie must've thought you deserved it for your long-suffering.

Are you going to hold now or switch to savings?

Albermarle

Since they increased the rate to 2.2% from October ( and now 3% from this month ) my prizes seem to have gone up disproportionately compared to before. However when I calculate it , it only works out at 3.3 % ( or 4% over the last 3 months ) so not that exciting !
However it shows that the increase on the prize rate ( giving more £50 and £100 prizes) makes one at least feel that you are getting a better deal.

RhondaD

frugalmacdugal said:

Hi,

RhondaD said:

Well after 16 months of tumbleweed, today I won £50! lol 🤣

good for you Ernie must've thought you deserved it for your long-suffering.

Are you going to hold now or switch to savings?

Well that's the thing. I was uncertain enough before 😂

Swipe

Albermarle said:

Since they increased the rate to 2.2% from October ( and now 3% from this month ) my prizes seem to have gone up disproportionately compared to before. 

Mine is the opposite, disproportionately down.

MikeJXE

Mine is down too so not sure what to do, I have the max and thinking of pulling out of premium bonds, I won £150 November £125 December and £50 today. It's usually the hope of winning something big that gets me to stay. Winning £1875 over 40 months isn't great now there are higher savings accounts 

ColdIron

The rates were lower over those 40 months

£325 over 3 months isn't bad. 2.60% which would need to be 3.25% on taxed interest