To withdraw dd's savings and spend them on....

[CatthiefKeith]

Premium Bonds?

She has around £600 in there, which equates to around £10 per year interest. She has accumulated this with Birthday and Christmas money (she is 4)

I have just bought her £100 of Premium bonds, and any winnings will be reinvested in more. Now I am considering chopping her savings in for more.

Is this a great idea or a really bad one? And why? I have never had Premium Bonds btw, so I am a bit clueless!

[Flaperon]

It's probably one of the safer investments so I'd say go for it. :)

[Pico2]

I'd describe it as investing rather than spending.

[CatthiefKeith]

Really? Well that's encouraging, I was expecting to be flamed for gambling with her money tbh!

[Hopefully]

Noooo. The equivalent interest rate of premiums bonds currently 1.35% (this is the amount paid out in prizes vs the size of the fund, and over time equates to the sort of interest rate you can expect). On the whole the returns are lower than you can get on a different savings account. Obviously there's the chance of a big win, but a much bigger chance of poor returns over a lifetime.

[callamia]

Do it. It's not gambling - you won't lose anything, and £10 interest is hardly going to put her through university is it?

I have about £1600 worth, and last year I won £25 three times!

[seastargirl]

I was bought some when I was born and have never had a penny from them!

[JeanSeberg]

Check here for better rates for children's savings:

www.moneysavingexpert.com/savings/child-savings-tax-free

[CatthiefKeith]

Right. I'm doing it. There doesn't seem to be any risk at all, and surely the more she has the more chance she has of winning?

Now I am back at work I was planning on putting money in her savings account every month - perhaps I will just buy Premium Bonds for her every couple of months?

Has anyone ever known anyone who won big on them?

[Sharpkat]

I won £1000 when I had £30000 of them once plus £25-75 most months. I now have £5000 and win £25 once a year....

[WalfordEast]

I remember investing £500 and winning £100. My friend was seething because she recommended me getting them and she had double that and had only won £25

smug

[CantWorkItOut22]

Are the bonds in your name? When I looked into setting up children's bonds for ds I'm sure it said that they work differently to adult bonds and would not be able to win the cash prizes.

[lalalonglegs]

My children have some (no idea how many ) and they seem to win £25 each 2-3 times a year.

[Fatmomma99]

I'd say do it. We've got some premium bonds (not loads, but a few grand's worth) and we win £25 quid every few months (it's always exciting to see whether it's me, him or DD who wins). This month, DD won nothing, he won £25 and I won £25 twice. Huzzah. We've set ours to re-invest (i.e. to buy more). The biggest win we've ever had was her (£100), and I'd say we win maybe 4 - 8 times per year. Nothing major, but seems to be more than the banks are offering at the moment, and MUCH more exciting!!!!

[CatthiefKeith]

I didn't see anything about her not being able to win? I just ticked the box that said I was buying them on her behalf?

[gobbynorthernbird]

DD had £1500 worth and they made £1100 in twelve years. She was pretty chuffed with that.

[JeanSeberg]

If you're planning to pay in every month you can get 6% with Halifax. Much better than PB rate.

[fakenamefornow]

I think the only downside is if you have more than one child, they all have the same amount in pb, one wins much more than the others, what do you do? As you only have one you don't have this problem. If you have 100k getting a good bit of interest I might say there are better places for it but as somebody said up thread £10 isn't going to put her through uni.

[CatthiefKeith]

I only have the one, there will be no more sadly, so sibling rivalry won't be an issue.

I do need to think about saving for her though, and Premium Bonds, for the time being, sounds like a fun way to do it.

Or maybe I should do both?

[SouthWestmom]

We solved the problem of multiple children by putting 1000 each into bonds (4000) and 4000 in from us and we will split any prizes equally, regardless of who won.
This is because I was very pissed off as a child when dsis won 100 via bonds.

[SouthWestmom]

I also put the 4000 into a three year bond first then bought premium bonds this april.

[Theycallmemellowjello]

I've had a hundred pounds worth for years and have win about 50 quid in total. They're not a good investment. I keep mine but see it as gambling not investing.

[Theycallmemellowjello]

Should have said I've had them for about 30 yrs

[Gymbob]

maybe a bit off topic, but only for what we spent invested DD's money in. we bought standard life shares for her at just the right time.