To but premium bonds?!

[Dollygirl2008]

I have recently come into some money. I'm planning on paying of 10% of it mortgage this year and next, and keep some back for a few treats etc. Someone said I should buy premium bonds instead of a savings account. I've read up on them - it seems that you literally have access to the money should I want it all back, but there is the added chance of winning small prizes?

Is it really as simple and risk free as that? And I can withdraw it when I want?

All my savings are in the max allowed Premium Bonds. Every month I win between £25 and £75, which represents a better interest rate than I could get anywhere else with instant access. I have had no problems transferring money to my account when I need to draw some out - it arrives in a couple of days. They are a good investment if you have enough of them to maximise your chances of winning.

And there is always the chance that one day you might win the big one...........!

Go for it, nothing to lose!

I've won £100 so far this year on around £6k savings

I would. My premium bonds have made more than in a savings account . I could make more in investments (which could go down) but the ease of access was what I wanted. And the winnings are tax free I think?

Thank you all - and for the secret thread

My mind is made up and I'm buying them tomorrow!!!

Premium bond prizes are also tax free. That is not usually important, but since you don't even have to include them on your tax return, it saves a bit of effort for people who have to do one.

Most prizes are £25 so if you buy £25,000 bonds you have a reasonable chance, on average, of winning around £250 a year. But luck is random so you might win more or less. If you have very few bonds you might reasonably expect to win very seldom.

If you have had bonds a long time, verify that they know your current address. You might have won and not received the notification.

Also download the NS&I app.

Easy to set up and lets you know every month if you've been lucky.

In our family - We all save using premium bond in the past 6 months I have won £75, MIL has won £225, my jammy sister won £5 k and my mum and behave also won - not sure how much

There is a 'chance of winning' calculator somewhere online.

I have won approx 400£ since March I think, less than a year anyway. I have the max amount though (holding it for property deposit)

We also used some money put aside for one of our DC and bought some more in my DPs name, he’s won.£25 in 2 months. A much smaller amount though. Anything we win from this account will be split back across our 2 DCs in place of interest earned (they’re only babies so plenty of time to add it up!)

It’s an ideal place to hold money at the moment.

I have £10k in a Marcus account, which like everything else has a rapidly dwindling rate. Should I move it to Premium Bonds?

This site calculates your equivalent interest rate depending on how much you win.

www.candidmoney.com/calculators/national-savings-premium-bond-calculator

I'm really surprised at this. DH has just a small amount, £1000 worth, but he's had them for around 10 years and never won a bean. When you factor in inflation, he's actually lost money.....

@CurlyhairedAssassin

I'm really surprised at this. DH has just a small amount, £1000 worth, but he's had them for around 10 years and never won a bean. When you factor in inflation, he's actually lost money.....

has he checked online with his holders number? And verified that they know his current address?

Prizes are randomised, and the fewer you have, the less likely you are to hit "average" returns. £1,000 for ten years has a fair chance of earning around £100, so it seems a bit below par if he has not had a single prize.

Op, depending on how much money you have, you need to sort it into emergency money eg, car boiler... About 2 or 3 grand?.
I'd have that in pb.. Then do you have a working float? About 1 grand?

(these figs are for lower wage earners like me).. Then your capital ie the bulk of that money should be in stocks and shares isa.
Current investment are up about 16 % roughly 2300. On about 12 thou.

That's my capital I did research, chose low cost index funds with 2 gamble higher risk funds. I brought in bit by bit over a few years and now add 50 a month.

You can't compare building society rates to stocks and shares rates... Etc.

Spread it around.. If 25 l is your capital there is no way I'd have it sat not working for me in pb.

Paddington slowly buy into a stocks and shares isa!

Look at vanguard funds, you can choose risk with their life strategy funds... Very low cost and your buying a little of everything so no risk really.

You are more likely to win if you have more which may seem obvious. Small holdings often never win but my mum has the max and expects to win more than once each month.

We have put £50k in, better that any savings (although have used up stocks and shares ISA allowance too)

Didn't know about the thread though!

Hopefully we'll see a few more winners on the thread next month, and the OP next year.

I once read somewhere, years ago, that if you have the old paper PB’s that you used to buy from the Post Office you won’t win because the newer system has different length numbers.
I’m not sure if it’s true but I have never won a penny in over 50 years, so I’ve bought some more and added my old numbers to my new bonds 🤞🏻

Not true.

I have 185 in premium bonds, left over money after my mum died and buying my wedding dress on the £185 I won £25 9months in. Had them two years so not expecting another win for many years as I know I never would have got £25 interest on £185

it seems that you literally have access to the money should I want it all back

Rather than metaphorically having access to the money?

Once you have around £20k in you seem to get average around 1.4% though it can vary a lot... can have several months in a row of nothing.
It is a gamble, you are gambling the interest that money would get elsewhere and the opportunity cost of investing it. However most people put money in premium bonds which is not for investment purposes, it is to store cash intended for use in 1-3 years.

It is interesting to see who has won the big prizes, what their holding size was. They are often quite large amounts, which fits if you think about it - a random ticket is drawn and the more tickets you have in the draw the greater the chance of winning.

@Subordinateclause

I've had a tiny amount of PM for 30 something years and literally never won a penny - I've definitely not had on average 1%! My daughter has only had hers a year and won something already.

The chance of winning each month is currently around 1 in 24000 and is going to drop to around 1 in 35000 soon.

That means that if you have 24000, on average you will win one prize each month, but in reality will win 0,1,2, 3 or possibly more prizes because that's how the statistics work out. The closer you are to the maximum £50k, the more likely you are to get close or even exceed the stated payout rate.

If you only have a couple of thousand, on average you will win one prize every 10 years and if you only have a few pounds worth, then statistically you're down to one prize in a lifetime, or possibly less.

But if you have millions of people all with a 'tiny amount' of PBs then most will win nothing, but a handful will win a decent sized prize.

I've currently got about £25k worth that's built up over the last couple of years and in 2019 I worked out my winnings equated to an interest rate of around 2%, which just beat instant access that year, and this year I've actually won a £1000 prize and 2 or 3 £25 prizes, so have done really well this year.

I think about 98% of prizes are for £25 and the others are more.

You can see details of the big prizes on the NS&I website. I like looking for those who've won loads from a £8 holding bought in 1976 or similar, there's always a few people like that so it does happen.

www.nsandi.com/prize-checker/winners

I'm going to post this a second time, since so many of the questions being asked here are answered in it, including whether it's actually a benefit that it's tax free, how likely you are to win and how much, why the 'interest rate' (also known as the prize rate) that people try to attach to them is problematic and doesn't actually reflect what you're likely to win...:

www.moneysavingexpert.com/savings/premium-bonds/