Premium Bonds

[Friarclose]

My dad passed in February 2021.

After I sold his house and paid his debts, gave my siblings their share etc I was left with 40k.

I rent, so obviously the intention was to use this as a deposit, however we can't get enough borrowing to afford a suitable home, even with the 40k.

Therefore, I've transferred it to premium bonds in the hopes that it'll be safe there and eventually property prices will lower again enough that we can afford something suitable for our needs (2 adults, 1ds, 2dss's eow, dog and a cat, hence needing a 3 bed home)

Has anyone else done this? Was it worth it? What kind of dividends might I expect with 40k in there?

My husband and adult children have about the same amount as you have.
Hardly a month goes by when they don't win something. Usually £75 up to £125 each time.

That money gets saved separately and soon adds up.

Good luck.

I've maxed out premium bonds and the percentage return is working out at about 1.5% so far (it's been 6 months). It's not guaranteed but it's above current interest rates for easy access and you do have a chance of winning a big prize. I think it's a safe bet.. however if you don't need to access the money for a while and can lock it away for at least a year you maybe better off putting it somewhere else at a higher interest rate (o reckon you need to find at least 1.75-2% to make it worth it)

How long can you leave it for?
It might be worth going to the money board here, investment or money.
Some good advice there usually.

If you can leave it for 5 year you maybe better off looking at ISA, stocks and shares and putting it in board index tracker fund.

You’ll probably win about £25-50 a month. Sometimes more and sometimes nothing. My highest win with 50k in there was £175. Very few months with nothing but it does happened.

I have about 14k invested and get £25 fairly often. I also got £500 about three months ago.

It's fine for now , agree with others it's about 1-1.5% return, usually get £25 or £50 each draw. But keep an eye on interest rates as they are going up (sadly for other reasons) and you might get a better deal soon with a fixed rate saver. I'm not one for risky bonds where you can make more.
It's super fun though, get the prize checker app. I always think I might get the knock on the door for the big one .

I've got it set to reinvest also then doesn't get frittered away , sometimes I draw down/cash in my winnings and leave the core there.

In the past, low interest rates meant you would do about as well with the Bonds as a good saving account.

As interest rates rise, I would question that and be prepared to move it to a savings account if I spotted one offering 3%+ (and I think they are now available).

Of course, there's always the chance of the big win

They are a safe place to leave your money.... it's where we keep our emergency fund as you can get the money withdrawn into your account within a few days if you need to.

If you are definitely locking it away for a year or more there are probably better options if you want to maximise your returns as interest rates are going to be rising.

But if you just want to leave it somewhere safe and dream of winning the big prize one day then I think premium bonds are a decent option.

The chances of winning £25 are 1 in 24,500. The odds of winning £50 are far reduced and the chances of an even larger prize are minuscule.

If you have your eye on that million, then you have a 1 in 59,082,205,208. That's one in fifty-nine billion, eighty-two million, two hundred and five thousand, two hundred... and eight. In layman's terms that's the combined people from 8 x planet Earths.

On £50k I was averaging about £600 P/A when the interest rate was 1%.

Property will not drop in price. It will get more expensive.

Presumably those odds are per bond, not for the total £40,000 pot?

Yes - the odds are per bond. Martin Lewis has a premium bond calculator on his site.

I think PBs are a good way to keep money if you might need it out quickly again (plus there is always the smallest of chances you might win something) however I have 2 x max in there (my husband's name plus my own) and I've just looked at the last 5 years "winnings" and on average I've received 1.13 percentage return. Rubbish really.

By the way what does 2 dss "eow" mean. I understand step sons bit.

presumably every other week?

Ah okay. I thought maybe she didn't like them

Haven't had anything from my premium bonds since before covid.