NS&I to cut Premium Bond prize rate to 3.8% from April – are they still worth it?

Stubod

..I will be hanging on to mine, but they are a part of a "variety" of other savings and investments...and dor me represents a good place for "emergency" funds...

GKOOGK

Invested £8500  in about 12 payments since Aug 2024...now says £12,263......+72.7% on trading 212

GKOOGK

GKOOGK said:

Invested £8500  in about 12 payments since Aug 2024...now says £12,263......+72.7% on trading 212

72.7%  dosent seem right ?...but still good interest (must be a glitch)

VXman

poppystar said:

But wins are tax free and so 3.8% equates to 4.75% for a basic rate tax payer and 6.3% for a higher rate tax payer. So if the only alternative is a savings account on which the interest will be taxed (assuming ISAs already maxed out)the effective rate is still as high as many available savings accounts, especially as their rates are reducing too. Of course you do have to win…😉

Interest is not taxed unless you have more than £1000 in a year. at 5% you'd need £20,000 in a savings account to reach that amount. Actually you could save more than and still be under the £1000 tax threshold that as in general rates are nearer 4% at the best.

eskbanker

GKOOGK said:

GKOOGK said:

Invested £8500  in about 12 payments since Aug 2024...now says £12,263......+72.7% on trading 212

72.7%  dosent seem right ?...but still good interest (must be a glitch)

It'll be a notional annualised return, but obviously isn't interest and has an entirely different risk profile from premium bonds so isn't a particularly useful comparator in the context of the thread....

Bravepants

I'll be hanging onto mine for now. I have enough risk assets, a DB pension in payment and a couple of side hustles. 

Also starting a small part-time business so it will be somewhere to safely store my tax payments before assessment time.