Premium bonds

[Wouldyougivemeamortgage]

Would you buy premium bonds? There doesn't seem to be a downside, does anyone know of any?

I have a small savings pot that needs to grow so I can buy a house. My savings are earning nothing in the bank so thought I could transfer to premium bonds, even if I win £25 it's more than I'd get in the bank.

Anyone have any experience of them?

One of the big winners recently had only invested a few months previously, I think in February £14k investment, and won £1m either this month or last.

I would just keep saving.
Or look into credit union.

I win from time to time, not as often as a few years ago. Always the minimum prize. Have had mine for a long time and not intending to sell them unless I need the money.

I’ve had premium bonds that were bought for me at birth and never won a thing in 36 years. Neither has anyone else in my family.

They're not generally considered a sensible investment, if you win an average amount, the interest rate is poor, but then it is anywhere atm.

I have a decent holding and get a small win most months and there's always the possibility of the big one, although it hasn't happened yet in 30 years

My other half has 20k in. But in the last 2 months he has had £150. He seems to win at least £25 most months.

I've just put my £3k isa savings into premium bonds as the interest rate went down again to barely anything.

It's emergency savings so I need instant access and it's safe there with the bonus of a chance of winning. Just one win in a year is probably more than I'd get in interest atm. Worth a try for now for me.

I win about twice a year £25.

I use them as slightly less accessible saving tbh. I’d get no interest in normal saving so I don’t see it as losing anything.

I don’t do the lottery- I see this as an alternative where I keep the money as well as any winnings 🙂

Now the minimum purchase is £25 I buy some every month 🙂

I have pretty much all my savings in them at the moment. I average about £50 a month in prizes. As others have said, they are not the greatest in terms of making your money work for you, but given how low the interest rate is I would rather put them in premium bonds and have a chance of a million pound prize than to leave my savings in my ISA and be guaranteed all of about £100 at the end of the year.

You would likely do better with stocks and shares but I’m too risk averse. Trying to be braver!

I have them instead of paying insurance for ddog. I have regular wins that have put me well over the interest I would have received from a savings account. Easy access and absolute security. I add to the pot every year and winnings are paid into bonds which I like I've won 4 times this year already.

I put £8k in them recently, my first draw is July, looking forward to it! Though realistically I know I probably won't win anything

The good thing is their value won't suddenly crash ( think shares portfolio) and there are no penalties for withdrawal. I put a lump sum payment into premium bonds as a short term step whilst I decided what to do . I've had a return of about 1.5% overall so I'm actually buying some more. My Regular Saver went down to 0.3% - I honestly think banks don't want to bother with ordinary savers - so I've closed that and will put it into premium bonds.

I've had the max for close to 20 years. Payout has averaged better than interest (both of which have of course gone way down, but still). Biggest win was £1000 some years back.

When do you want to "realise" your pot for this house purchase, and what do you want it to do in terms of growth - do you want aggressive growth with the inherent risk? These are the questions it's worth asking yourself.

Some people tend to invest in shitty asset classes or things they understand because of a historically conservative asset to risk. They then get disappointed when they don't get back what they'd want.

I'd be earning single figures of interest in the bank with the current interest rates so I figured I'd be better off with premium bonds, as at least I'd have the potential to get more from my savings that way, but equally if I win nothing its no real loss.

I have about £15k in premium bonds and DP has about £30k. Between us we usually win at least £25 or £50 every month. It's a better rate of return than any savings accounts at the moment and there's always the chance of winning big!

I highly recommend them if you have some savings that you need access to. I have around £14k and regularly get 25-50 a month. The prize fund is linked to interest rates, so the same return but random. Easy access, I can withdraw, for example at Xmas, then top up again if I ever have spare money. (Unlikely) It puts any savings just out of reach.

I've got £1000 of premium bonds from an inheritance that i started about 2 years ago. Not won anything from that. Also got £15 of premium bonds that I was given when I was born. I've won £50 twice from those, once when I was 16 and once when I was 17.

My MIL gets at least one win a month - she competes with one of my nieces who also does well. We had £4k for a few years didn't win a thing.

We both have maximum in (now £50k per person) and win between £150 and £400 a month generally. Always live in hope for the big one!

My parents bought my son £100 of Premium Bonds when he was born, and he won £10,000 one month.

Made me feel a bit churlish as, at the time,I thought it would have been better in a savings account (albeit earning a pittance in interest ).

I have a small savings pot that needs to grow

How small?
The amount you buy matters. We’ve not won a thing on the ones DGM bought us all 40 odd years ago. DGM had around £5,000 worth but she cashed them in because she never won.

With interest rates so low we feel there is little to lose by put our cash that can't be invested into premium bonds so I did this at the end of last month. Hopefully we'll get a rtn of about 1.4ish % which is more than you'd get is savings at the moment (assuming a Lisa isn't an option for you) and you never know you might win a big prize :-) but of added excitement.

I've only considered these recently. Previously had lots of current accounts earning 3-5% plus a few savings accounts at 1.5% but these have all been chopped away at recently with fewer and fewer options so we've gone for the premium bonds. First draw 1st July 🤞🏻

This is a silly question but you might be able to help.

I have some savings earning a pittance I could tuck away in PBs but I already have £100 in there and for convoluted reasons I'd like to keep any new PBs separate from that batch.

Is that possible?

The £100 is from a lottery syndicate and we agreed to pop into bonds in the hopes we might win big! So I'd want to keep that separate for ethical/transparency reasons with my syndicate.

It's going to be pretty much impossible to get significant growth without risking the capital in the short to medium term. But premium bonds are not a bad option, and the return is likely to be close to the average payout rate the closer you are to the maximum holding.

But if your pot is a few thousand, chances are that you'll win little or nothing, but the average payout rate is 1.4%, which is higher than any other instant access savings account.

You're effectively gambling the interest you would definitely receive on your savings account, so it's up to the individual how they feel about taking that risk.

Say you have £10k of savings. The best instant access savings account pays 1.2%, so you'll get £120 per year in interest.

You'd have to get 5 x £25 PB prizes in a year to beat this rate, but typically, you'd probably get 2 or 3 prizes per year, so an effective interest rate of 0.5-0.75%, so less, but better than a lot of savings accounts out there. Plus there's a small chance you'll win big, and a reasonable chance you'll beat the best savings account.

I have built up £14k PBs over the last year. In 2019, my prizes equated to an interest rate of 2.1% so better than instant access savings. This year, I've had 2 x £25 prizes so far, so obviously losing out on a bit of interest, but there's still the rest of the year to go.

SciFiScream

You could just make a note of the bond numbers, so you'd know which batch the winning numbers come from. Or you could just set up a new account to buy your new bonds and they'll be on a different holders number.

I have bonds under two holders numbers because I've had a small amount since I was a child but couldn't find my number when I wanted to buy more. I tried to join the two holdings but when I wrote to them, they wanted loads of ID and it sounded like too much hassle. I have my two 'accounts' showing on the app I use to check the results, so am just leaving it like it is now.