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Premium bonds vs savings account?

(7 Posts)
lunavix Tue 28-Jun-05 13:50:51

ATM we have a savings account for ds 9(halifax, about 5% pa) and we put £20 a month into it (all we can afford atm sadly) plus any money he gets for gifts, any extra we have (say we have a tenner here, etc) and he's probably got about £700 so far (he's 14 months old).

I'm intereted in getting him some premium bonds, but I don't know whether to do this alongside his savings, or instead of?

How risky are they? eg if I put in £200, will we have 200 still in 18 years? I'm also worried I'll spend this £100 on bonds, then never get any more and they won't do anything....

Any ideas?

misdee Tue 28-Jun-05 13:53:26

my kids have savings accounts. i am also thinking of premimum bonds for them. so am going to watch your thread with interest. have some pending for myself atm, waiting for the forms to go through.

lunavix Tue 28-Jun-05 13:54:23

I'm worried one will get neglected for the other, and as we don't contribute much at the moment bonds might be a little pointless.

misdee Tue 28-Jun-05 13:59:03

thats what i'm worried about as well. i have the ones for me as would just wste the 100 i have just put in if i left in my bank. dd1 needs some sort of investment for her 18th like the other 2 have for the CTF.

starlover Tue 28-Jun-05 14:00:05

ds's grandparents just gave him £100 in premium bonds.

i had no idea what they were! lol.. or rather, no idea how they work.
but dp said taht if at any time you decide you don't want it you just tell them and they give you your money back.

so... it's really just weighing up the interest you would get if you put the money in a savings account against the money you could possibly make on the bonds... which isn't definite!

ds's grandparents, and his great-nan both have premium bonds and his great-nan reckons she gets something at least every other month (although i don't know how much she has in them!)

starlover Tue 28-Jun-05 14:01:01

if you want something more secure then go for savings account because you KNOW that you will be earning interest on it.

in 18 years time your premium bonds may have earned you nothing and you;ll just be left with the original money you put in

Twiglett Tue 28-Jun-05 14:01:54

premium bonds .. you always get capital back so yes you'll still have £200 in later years (it just won't be worth the same as £200 now due to inflation)

you do it cos you fancy a flutter .. there are no guarantees you will win.

My Dad bought me £100 premium bonds 19 years ago and I have won 1 x £50 prize in all that time .. however you might be lucky and one of your numbers might win more frequently or win the big prize

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