Premium Bond Winner ?

pbw

stuzhunter wrote:

I started buying premium bonds since June 2003. I have not won anything until this month. It has been some wait but this month I won 2 x £50. I hope this is a start!

what is your holding?

fireuptheband

Held £800 since Oct 06 and won £50 already.

Increased monthly dd to £150 (from £100) to better the chances of 'the big one'!
May drop an extra grand in for the big April draw.

busy_2

So, how do you work out how much you could earn on a high interest account in 3 years Vs investing £30000 pb-probability of winning?

Sting_2

busy wrote:

So, how do you work out how much you could earn on a high interest account in 3 years Vs investing £30000 pb-probability of winning?

Premium bonds are supposed to give an average return of 3.6%. This is however tax free. Therefore if you invested the full £30,000 you could expect and annual return of £1080. This is tax free.

Compare that to a high savings account, the best I can find at the moment for £30,000 is Alliance & Leicester's Instant Access account offering 5.8%. This will give you either 5.8% (non-tax payer - unlikely if you have £30,000 to splash around!) 4.64% (basic tax payer) or 3.48% (higher rate tax payer).

I could be really pedantic and factor in £3000 into the best ISA, but I think you will see from the figures above it is better to invest in a high interest account than with 'average luck' in premium bonds if you are a lower or non tax payer.

HOWEVER, if you invested in a high interest savings account you will only earn either £1740 (non-tax payer), £1392 (basic rate tax payer) or £1044 higher rate tax payer. If you invested in premium bonds you could walk away with £24,000,000 (if you won both £1,000,000 jackpots each month for a whole year!) or I guess you could win nothing, or something in the middle!

So I guess the choice is yours, do you want to 'risk' making no money, or do you want the possibility to make a huge retrun on your investment?

Lopo

Sting wrote:

Average luck does well enough in some cases.

As mentioned previously, I've achieved 5% already in return winnings since purchasing a large holding 5 months ago. Now I have a possible 7 months remaining for that 5% figure still to grow with any further possible winnings...

The idea for me was to purchase a large amount, let it run for 12 prize draws, and see what the outcome was and judge it then. Has been a pleasing experiment for me so far.

webwiz

OK here's the deal.

If you invest £30,000 NSI will "pay" £90 each month into the prize fund. You will receive, more or less, on average, £72 per month in the form of £50 and £100 prizes. The longer you leave the money invested the closer you will come to that figure of £72 per month.
£9 a month will be a gamble on winning £500 or £1000, which you can expect to do every few years.
£9 a month will be a gamble on winning a major prize which you will probably never win - but hey someone's got to!

bella123

I invested £3500 in 2001/april,won £500 in september and havent won anything since.:D

busy_2

sting- thanks for that info, I guess Im classed as non tax payer as Im currently a student. I dont have £30000 to splash around, sadly my father passed away and from the sale of the house, inheritance is expected to be somewhere between £25-45k(there are four of us dividing it)

Im not in a position to go and spend the money and kinda think I would prefer the little bit of excitement waiting for wins rather than dumping into high interest account. I would be happy to stick it in pbs for 3 yrs or more and not worry too much about the interest lost-at least its a better bet than the lottery, afterall your not losing anything!(if you dont count the interest you could of got from bank of course)

My fathers death was not expected, it was sudden and I feel that I would of had to get through the next 3 yrs of being a student getting through a degree if he hadnt died and so I feel I can still manage now without dipping into that money(if you see what I mean-what Im getting at Im not worrying too much about the interest of the money because Im going to treat it as if I hadnt received the money in the first place)

lopo-thats interesting reading, what have been your average monthly wins, thats if you dont mind me asking of course?

webwiz

busy

I'm sure I speak for all moneysavers when I say how sorry I am to hear about your father.
IMHO there is much to be said for your idea. You will win a prize most months, usually £50, occasionally £100. You will also have a fair chance (maybe 30%) of winning £500 or £1000 sometime during your course.
This random arrival of windfalls well suits a student lifestyle.

My only reservation would be that if you intend taking the maximum student loan you will build up a lot of debt by the time you graduate and perhaps you should consider using your inheritance instead. You don't need to make this decision now - you can use the money to pay off the student loan at any time, for example if the rate of inflation started to rise because this is the rate of interest which will be applied to the student loan.

best of luck with the course

pbw

don't use your inheritance.

take out a student loan as the interest you pay on the loan is inflation which is always lower than the highest paying accounts