Premium Bond Winner ?

Section62

justwantedtosay said:

I'm sure many holders hang on thinking their luck will change, but why would anyone buy PBs now, other than a small number just for a bit of fun?

Someone on this very forum thinks popping £50k into PB's would contribute to a good investment strategy...

https://forums.moneysavingexpert.com/discussion/comment/80110884/#Comment_80110884

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justwantedtosay said:

I'm sure many holders hang on thinking their luck will change, but why would anyone buy PBs now, other than a small number just for a bit of fun?

Because, when it comes to premium bonds, you just can't reason with some people

https://www.youtube.com/watch?v=q1EcrlFiwP4

FIREDreamer

My best month ever …

Keswick1uk

Fabulous! This increase in fund for prizes is really making an impact

jak22

Placed in a one year fix, a full holding could return twice that of PBs assuming an effective 2.7% rate having not increased for a while now - but that fix isn't tax free of course. Then it would be possible to make a post every month/ saying 'Ive just received another £230 interest'.

Sarahspangles

PBs don’t offer the best return for all savers, but they can make sense for a higher rate taxpayer who’s used up their ISA and personal savings allowances. Inheritance, or a significant pension commencement lump sum can easily put you in a position where you need to spread your savings across multiple institutions.

El_Torro

jak22 said:

Placed in a one year fix, a full holding could return twice that of PBs assuming an effective 2.7% rate having not increased for a while now - but that fix isn't tax free of course. Then it would be possible to make a post every month/ saying 'Ive just received another £230 interest'.

A one year fix is no use to me. My Premium Bonds are part of my emergency fund and a one year fix isn't much use when it comes to that.

Assuming we're only looking at easy access accounts just under 4% is about as good as it gets at the moment. Better than the average luck of Premium Bonds, though it's important to remember that Premium Bond winnings are tax free. A 40% tax payer making 3% in Premium Bonds would have to make 5% in taxable savings to get the same return.

Premium Bonds can be considered a gimmick, and for many people that's exactly what they are. For others though they make financial sense, at least today.

justwantedtosay

El_Torro said:

Assuming we're only looking at easy access accounts just under 4% is about as good as it gets at the moment. Better than the average luck of Premium Bonds, though it's important to remember that Premium Bond winnings are tax free. A 40% tax payer making 3% in Premium Bonds would have to make 5% in taxable savings to get the same return.

Precisely 4% with access at the Coventry BS. And don't forget that most get some interest tax free. Or fix in an ISA [admittedly at a lower rate than non-ISA fixes] which you can access with charges, which won't be a problem if it's an emergency fund and you don't have an emergency.

El_Torro

justwantedtosay said:

El_Torro said:

Assuming we're only looking at easy access accounts just under 4% is about as good as it gets at the moment. Better than the average luck of Premium Bonds, though it's important to remember that Premium Bond winnings are tax free. A 40% tax payer making 3% in Premium Bonds would have to make 5% in taxable savings to get the same return.

Precisely 4% with access at the Coventry BS. And don't forget that most get some interest tax free. Or fix in an ISA [admittedly at a lower rate than non-ISA fixes] which you can access with charges, which won't be a problem if it's an emergency fund and you don't have an emergency.

I already have cash in regular savers which will give me more than £500 interest this tax year, so if I take anything out of Premium Bonds I will pay 40% on any interest earned. As for Cash ISAs, they're of no use to me either. I use my ISA allowance on Stocks & Shares ISAs, which (in my opinion) is a much better use of my ISA allowance.

Keswick1uk

I'll exceed £1000 now rates have risen on interest, but I semi retired in March so I'm now a BRT, so tax on interest isn't too bad.

There's going to be a lot of us dragged into self assessment this year. 

I was thinking of moving my PBs into a fixed rate bond account now rates are higher but kept stalling because each month rates seem to be increasing. Pleased I did.

My kids have their house deposit savings in premium bonds (as well as the special house saving vehicles). They were also thinking of moving out of PBs if their prizes fall well below 3 percent.