A Couple of Premium Bonds Questions

martinman3

Aegis wrote: »

the only real method to increase your money is to consistently beat inflation in the long run.

and buy NS&I Index Linked Certificates instead

Jonbvn

westy69 wrote: »

but you dont get your money back on the scratch card if you dont win.

just my opinion each to his/her own i guess

What dunstonh meant to say is withdraw the interest each month, not the capital. I.e. When you hold PB's you are gambling with the interest not the capital.

Jonbvn

Pendle_Gazza wrote: »

I don't go in for all these negative comments about bonds. We all lose out every day on all kinds of bills and purchases. It's just a bit of fun, and a lot of luck.

A small percentage of your cash ain't gonna do any harm. I've got £5K, won very little, but hey, I like the thought it 'could' happen ;-) Go for it, and good luck.

I agree that holding a few grand in bonds is not really a problem, assuming you have savings and investments elsewhere. Unfortunately, for a large proportion of the population, this is not the case. I understand that PB's represent the largest single holding of all the general publics "savings".

Remember that this is the Money Saving Expert site. Therefore it is important for people who come to this site to know that PB's give a much poorer return than a lot of other savings.

dunstonh

I don't go in for all these negative comments about bonds. We all lose out every day on all kinds of bills and purchases. It's just a bit of fun, and a lot of luck.

There are people with no real savings or investments who have £40k in premium bonds.

Is it really fun to have you money in something that is typically finding it hard to keep up with inflation if you get the average winnings?

Some people seem to get excited about the occassional £50 turning up. What they dont realise is that if they had their £20k sitting in a real savings/investment they would be getting more than that each month.

Some people are betting their futures on state funded lottery.

Aegis

westy69 wrote: »

but you dont get your money back on the scratch card if you dont win.

just my opinion each to his/her own i guess

As jonbvn hinted at, you don't with Premium Bonds either. The "stake" is the interest you lose out on by being in a lottery instead of getting money. Nominally that's 3.6% tax free (or whatever it is at the moment...), but in actual fact the interest you're gambling is whatever you could have made anywhere else, so at the moment about 6.4-6.5% AER in the best savings accounts.

With £5k, that boils down to about £325 per year before tax, which I think would be quite a lot to be spending on lottery tickets.

westy69

fair points as i say i am just learning (the hard way)

jamesd

The best time for the first purchase is the last day of the month in a Post Office. That will be in the draw a month later. The best time for later purchases is online or in a Post Office on the last day of a month once you have your holder's number.