To put money into Premium Bonds?

[Florence1960]

My Dad always had them and loved getting the odd win. If you had a bit of spare money, would you invest in them?

DH and I both have £50k in them. This month we both 'won' £100

DSis, DM, DDad, DBIL and DGM all have £50K as well.

DDad got £100
Dbil got £50
and I think it was £25 each for the rest.

It is variable but over the last 4 years I have 'won' between £400 and £600 a year which is far more than I would have got in interest in a bank account.

DM once won a £1,000, but normally it is just a £25 prizes.

Just to put into %.

Dh has £900 worth and has won 2 x 25.
I have about 3000 and have won 0.

I paid 1800 for Scottish mortgage shares at the same time and that has increased to about 3900 or thereabout, roughly 80% increase!

My more basic funds, with vanguard have earned a few hundred in the same period.

I think that Martin Lewis worked out that for the average person with average luck they are a waste of time

I’ve just put £20k in -
First draw in October , odds of getting a prize are 25,000 - 1 so I’m hoping to get at least £25 by the end of the year

I think that Martin Lewis worked out that for the average person with average luck they are a waste of time

The average return on each pound invested is as good as any savings account, actually better than most. It's usually true that most people will get less than they could have got in an interest-bearing account, because the money to pay the minority who get more comes from those who get less.

I don't agree that it's a worse deal just because most people are likely to have a worse return. That assumes the possibility they could have won the million pounds was worth nothing.

On the other hand, neither premium bonds nor savings accounts are an investment, they are just places to hold savings. The interest return is negligible.

(One could argue that a fair bet, which a gamble on premium bonds is, is nevertheless bad value because a pound foregone is worth slightly more than a pound gained, in terms of utility. But if the amount in question is negligible in the context of overall wealth, that argument doesn't really apply.)

We would pay tax on normal savings account interest, so we have max holdings (would always advise filling your ISAs first which we do every year)

I'm pretty sure I read that shares over the medium term do better than property and premium bonds. But the money I have in premium bonds needs to be used for something else soon, I just needed somewhere to park it.

I have a large amount in bonds. I win every month. Sometimes just £25, sometimes £50, sometimes £75 and sometimes £100. I win more than if I left the money in the bank but the return is not very good.

Like people say there is always the chance of a big win.

It depends on how much money you have to put in and how risk averse you are.

Stocks and shares will probably pay more but you could lose money. Anything that you put into premium bonds is completely safe.

Most of my money used to be in isas. Before the crash, I used to get decent interest. Since then, even with swapping between different isas and fixed term savings accounts, I get hardly anything.

DP has always had premium bonds so I decided to have a go. I started in February so have been eligible for the draw from March.

I won nothing in August but £25 in March, April, May and June, and £50 in July and September. That easily beats the interest I would have got anywhere else. Winnings are automatically reinvested until I reach the maximum amount.

DH has about £5,000 in PBs, built up over a lifetime of gifts and also "investing". He seems to be really lucky and wins once or twice a year. His sister has about the same and hardly ever wins. His mum (the manager of all the PBs - it gives her great joy to check them religiously) seems somewhere in the middle. I think he won about £75 last year, which is probably more than he would have earnt in interest.