Time to dump Premium Bonds?

emmaj1045

With the higher rates now available on relatively short-term fixed accounts I am considering moving a large chunk out of Premium Bonds. Anyone have arguments against as I do love seeing if I have won each month?

Albermarle

emmaj1045 said:

With the higher rates now available on relatively short-term fixed accounts I am considering moving a large chunk out of Premium Bonds. Anyone have arguments against as I do love seeing if I have won each month?

There are lots of threads about PB's if you search the forum.
In summary though as you say you can get better rates elsewhere, but some people like the 'excitement' of seeing if they have won each month .
It is your decision in the end.

auser99

emmaj1045 said:

With the higher rates now available on relatively short-term fixed accounts I am considering moving a large chunk out of Premium Bonds. Anyone have arguments against as I do love seeing if I have won each month?

Pros - the excitement element you mention, plus the tax free status.

Cons - less you have in them, the more your reward chance drops off a cliff. Average luck without any "big" wins will be a fair chunk under current fixed bond rates.

ranciduk

Yep in the end I preferred the excitement of getting a guaranteed, monthly return on my savings in EA accounts - rather than the odd £25 , if I’m lucky

ok I’m not gonna win a million pound anymore

but that wasn’t ever gonna happen anyway.....

southone

Increase in prizes from july too, heres hoping

dgpur

emmaj1045 said:

With the higher rates now available on relatively short-term fixed accounts I am considering moving a large chunk out of Premium Bonds. Anyone have arguments against as I do love seeing if I have won each month?

Getting returns similar to the best paying EA accounts is a bit of a crapshoot. Getting anything higher is very unlikely. Getting one of the top prizes is so statistically close to 0% as to effectively be that.

I closed my premium bonds and put the money into certain returns elsewhere.

Gary1984

I'm sticking with them due to the tax treatment and I can't be bothered constantly chopping and changing to get the best returns. 

Billxx

Gary1984 said:

I'm sticking with them due to the tax treatment and I can't be bothered constantly chopping and changing to get the best returns. 

Yep, my attitude also.

Rheumatoid

emmaj1045 said:

With the higher rates now available on relatively short-term fixed accounts I am considering moving a large chunk out of Premium Bonds. Anyone have arguments against as I do love seeing if I have won each month?

Only argument I see is putting your money back in to a position of being taxed if you are over the PSA.  But even then returns on instant access after tax are likely better than PB's - depending on which tax bracket you are in.

subjecttocontract

Premium bonds are tax free with easy access to your money. So if, like me, you have maxed out your ISA and used your other tax free allowances then the 3.7% from July is equivalent of 4.62% for basic rate taxpayers and 6.16% for higher rate taxpayers.
We will be holding onto ours.

mebu60

Tax treatment a huge benefit. Plus I am well over the expected average return year to date. And expecting a return to the mean in H2!