NS&I premium bonds any good?

[Lilifer]

Can anyone advise me on their experience of these premium bonds. as i understand it you get a bit more or a bit less than the equivalent of a decent interest rate in prozes over the course of a year, albeit not every month, is that rigth? Otherwise why wouldnt people jist put the cash into a high interest savigns account and pay tax on the interest? im tryimg to figure out which one comes out ahead after 12 months in terms of cash in your pocket?

The more you have invested, the more bonds you hold so statistically the greater chance of a prize.
I’d say in the last 12 months I’ve won maybe 4 times. The smallest win was £25 but I did get £250 one month!
It’s a fun way of saving!

@MalasanaThank you! I have £50k to invest, was hoping to accumulate around 4% in prizes over the course of a year, do you think that’s possible/realistic?

I have full holdings which is the same amount of your investment and my biggest win for a draw was £600 .
However it's swings & roundabouts to amount of winnings as the whole point of them is the gamble . If you want guaranteed interest pick an ordinary investment a/c .

That’s a lot more than I have in PBs and I win quite regularly so I reckon you’ll do well.

I can’t answer as to PBs v interest as I have never considered it. I just decided a few years ago to put some of my savings into PBs as my friend was having a lot of fun winning and encouraged me to invest.

There’s an app you can get that you link to your account and you click the reveal button each month to see if you’ve won. I can’t tell you how much it starts my day off with joy even if I just get £25.

It’s like doing the lottery but you never lose your money 🤣

I’d advise you to maybe invest half of your £50k and compare how you do over the year with the other half in an account somewhere. You’ll work it out that way?

£600! I’d be screeching at that!

The fun I have pressing the reveal button though 🤣

Ok thank you - do you think that overall on average you’re getting a decent amount each year for the amount you have in the bond? I would like to ideally clear about £1500 a year to make it on a par with a (taxed) interest on the same amount in a savings account

I have ten thousand pounds in Premium Bondsand have won 700 pounds this year!

I was given some at birth, and I've never won a penny in over 50 years !

Aw that’s great and sounds like fun! Great suggestion to split the amount and compare the amounts at end of year

@oncemoreuntothebeachdearfriendsoh god really?? Was it a small amount tho, although still you should have won something by now surely??

Wow!! That’s fantastic 👏🏻👏🏻

I have full holding and get £100 or more every month at least. This month it was £575!!

I have full holdings and I’ve tracked my winnings on a rolling 12 month basis over the last few years. It’s always been between 3.4% to 5% - that’s for me; will vary between people and depending obviously on holdings.

No. I don't. It's all about luck

I wouldn't put money into PBs unless I wanted to avoid paying tax on interest and had used my ISA allowance for that year

I've had them since first draw in May this year, maximum invested. So far two wins the first two month of £150 each and the third month £25. Then nothing for August and September. This is my first experience of holding them, so don't really know what to expect. I guess it's all just random luck.

I’ve held premium bonds since my birth in 1956 and have had two small wins in 70 years.

My niece holds the full £50k and gets a win most months, though the amounts are nothing life changing. They’re really only worth it if you’ve already maxed out your ISA and SIPP contributions.

nobody can answer that though?

The whole point/fun of PB is that you could win a million, you could win absolutely nothing.

In terms of why people don't just accept the tax on the interest instead, it's a personal decision. I suppose people who are more likely to have spare money beyond an amount where they've already filled this year's isa are more likely to be high tax payers, so the thought of paying 45% on everything (or even just 40% over the first £500), overrides the risk of not winning anything. On the max PB amount of £50k, in the highest easy access account available at the moment (4.5%), that would equal £1012 of your £2250 savings interest going in tax, which, particularly if you already pay a lot of tax, would likely stick in the throat a a bit! Similarly if they've got that much savings, they aren't going to be struggling for money so can afford the risk of not winning anything vs the definite fact of paying 45%.

IIRC martin money saver had a calculator that worked out your average odds, which went up the more PBs you held, which might be useful, and also compared it to how much interest you would earn in a normal account.

But nobody can 'tell' you what you might win. If the risk of not winning anything is too much for you, don't buy them.

Nobody can guarantee you'll win a penny on PBs
But then again you might win a million.

I've had a 2.7% return in prizes on £13.5k in the last 12 months. Not great and I've probably lost in terms of inflation.

Have you already maxed your ISA? If you want a guaranteed return you'd be better off putting £20k in an ISA at 4ish % and the rest in PB if you fancy giving them a go.

A Mumsnetter won £10k last week

Won nothing in 4 years so removed most into ISA

My winnings this year is 3.11% so that falls below your expecting % but we still have Oct , Nov , Dec to go so like I've said it's a gamble .
I think some people will tell you they make ££££s over the average savings a/c and others not so much .
my best year was £2,000 which is 4% so only breaking evens but I think that,was when savings interests were low but there will be many more that will tell you they had a much higher % ..
take a look in the premium bond thread .

Me and husband both had full holding for about a year or so. I averaged about 2.5% winnings, husband was about 6.5%, so if you combined us we were on par with a cash ISA. It’s totally luck of the draw though so if you are going to be annoyed/disappointed that you don’t win as much as you think you should, then a cash ISA is probably best for you.

Blimey! I’ve had some since I was child and have never won a penny! I invested some more a couple of years ago. Still nothing! I can’t believe so many others are winning so much.

You can get a guaranteed 4.55% in normal savings so I’d go for that rather than premium bonds any day. It makes sense if you have oodles and oodles of cash but on 50k you're better with a guaranteed return, even if it’s taxed. It’s a bit gutting when you only win 25 or zero on prem bonds!

You are unlikely to achieve 4%, but bear in mind winnings are tax free - my equivalent taxed rate would be just under 4%, over several years (with the full £50k) and you are always in with a chance of a big prize. To get the best return you do need the full holding, £50 won't win you anything. If I remember correctly Money Saving Expert did a feature, several years ago, where they got an actuary to work out the likely return over time for different levels of investment. In practice they are only a decent investment if you need easy access, have already used your ISA allowance and don't wish to be exposed to market volatility. That's not to say gifting a few to your grandchildren is a bad thing.