Premium bonds

[Backtoschool101]

DH wants to keep savings in our account but I know he will be tempted to spend it. İt's not much yet only £800. I suggested premium bonds so it isn't easy to withdraw but can if needed but with the added bonus of a small chance of winning something. The interest rate is rubbish on our account so we won't really be losing anything

What’s the question?

Ah pressed enter too early.... İs it worth it? Should I transfer to bonds or would it be better to be in a savings account. We want to save for a mortgage deposit and not sure what the banks would favour

Who knows? You may get a massive win, a small win, a medium win.

You know what you've going to get from the savings account, it's next to nothing.

Premium bonds are really safe as government backed!

If you are saving for a house, a LISA (Lifetime ISA) could be best - they have better interest rates that the currently hopeless savings accounts AND the government tops up your savings by 25% if you use the money to buy a first home.

www.moneysavingexpert.com/savings/lifetime-isas/

If for some reason you are not eligible or that doesn't suit you, then yes Premium Bonds sound a good option. You can set up a direct debit, make one-off investments, and you get the added excitement of checking the prize-checker app each month! Though obviously your chances of a win are quite small with £800.

But - you never know!

We've got a lot of premium bonds, and an equal amount in the bank.

Hands down, the premium bonds earn more interest. We get at least one £25 win per month off them, some months a lot more.

If you aren't intending to touch it for now, might as well go with the bonds for exactly the reasons you state - you will barely earn any interest anyway, so might as well have a chance of winning something.

Probably worthwhile - I have a few £k in premium bonds.
They've reduced the prizes in line with interest rates falling, but it would earn sod all in the bank.

Ok thanks all. Im not worried about winning anything. More what the banks will say when we eventually have enoigh and apply... do we transfer it back to our bank account whem there is enough... or into a savings account before we apply or leave it in the bonds and say to the bank we have the deposit in the bonds etc. Sorry i probably sound a bit stupid but after a long time i am finally able to start saving and hope to buy in a few years time

@Backtoschool101

DH wants to keep savings in our account but I know he will be tempted to spend it. İt's not much yet only £800. I suggested premium bonds so it isn't easy to withdraw but can if needed but with the added bonus of a small chance of winning something. The interest rate is rubbish on our account so we won't really be losing anything

Premium bonds are very easy to release. 2 days after request they are in your account

I have premium bonds and without doubt have won much more than I'd have made in interest in the last few years. Most months I win at least £25/50.

It only takes a few business days to clear too so it's not hard to withdraw but like you say, hard enough to prevent silly little spends.

I love premium bonds when you know you'll get naff all interest at the bank. Just that little 'what if' factor. Plus you get your money withdrawn in a day or two of you need to so not instant, you have to actually think about it, but quick enough for most purposes. I saved up for my mat leave into premium bonds and 'paid' myself a bit each month. I only won £25 in that time but that's far more than it would have earned in interest.

Why not? At least it's safe.

But your chance of winning with £800 is vanishingly small. Last time I looked, the odds of any individual number coming up were 24,000 to 1, and it might be worse than that now, because I know they've revised things recently.

Thanks all. Ive done it! We need to be sensible and too easy to spend it! Especially when its a small amount! I k ow we wont touch it now and will carry on i think. It was very easy!

Good luck, my wife hasn’t won anything for two months. Maxed.

Banks don’t care where you keep your money, they only care that you have enough of it. When you buy a house you have to prove that you have enough to the bank (provide them with account statements) but you don’t give any of the deposit to them, you give it to your solicitor who gives it to the seller along with the money the bank is lending you.

Thank you @PattyPan

If you are buying a house in over 12 months time, then get a LISA. Lifetime ISA.

Put in £1 now. £3999 before April 5th. Then another £4000 before 3rd March 2022 (not sure exactly when before). And you’ll get 25% from the govt. ie £2k.

The £1 is to start the 12 month tick down before you can utilise it.

@RainingBatsAndFrogs

If you are saving for a house, a LISA (Lifetime ISA) could be best - they have better interest rates that the currently hopeless savings accounts AND the government tops up your savings by 25% if you use the money to buy a first home.

www.moneysavingexpert.com/savings/lifetime-isas/

If for some reason you are not eligible or that doesn't suit you, then yes Premium Bonds sound a good option. You can set up a direct debit, make one-off investments, and you get the added excitement of checking the prize-checker app each month! Though obviously your chances of a win are quite small with £800.

But - you never know!

The interest rates are trash on LISA. Mine is down to like 0.35% or something.

Yep, that’s not good interest, but most savings accounts are 0.1 or even 0.01 so....

And the big pull is the Gvt’s 25% top up, which is a serious increase in value beyond any savings interest.

@RainingBatsAndFrogs

Yep, that’s not good interest, but most savings accounts are 0.1 or even 0.01 so....

And the big pull is the Gvt’s 25% top up, which is a serious increase in value beyond any savings interest.

Yup it’s good if situational.

I have some inheritance and want to buy soon. Put 4K+4K in (myself and wife have an account each) in June 2019. Then will put another 8k in before April this year. Then will put another 8k in next year before we buy, or another 8k in April 2022 or whenever we end up buying.

We’d be better off just buying any house right now as interest rates are so low, and house prices are continuing to rise, but at least this offsets some of the pain. Quite like the idea of getting 6/8/10k off the govt.

If it’s to buy a property then why not get a lifetime ISA or something? Then you get the government top of of 25% for first time buyers?

I’ve just withdrawn my Lisa to buy a house - I’ve had it 3 years so have 3k extra in it than I actually save plus it’s got 15.25% interest on it at time of withdrawal.

The interest rates are trash on LISA. Mine is down to like 0.35% or something.

That's actually still more than most accounts are paying, even without the bonus at the end, which is the real draw.

@Doomsdayiscoming thanks for the info! I will remember this. Unfortuantly i wont have anything close ro 4 thousand by april! It took me a long time to save what i have! We had a family emergency and used all our savings for MIL to have an operation. DH from overseas. Ate all our savings and then she passed away not long after. Dont regret it at all but we are effectively starting from scratch with a lower income due to covid. So its going to take a while to get back on our feet. Our plan is to buy something small and rent it out so we have something as equity for later in the future. Not sure if this is a good idea yet but we dont have enough savings for a 100% solid plan yet. Just need to save full stop!

My bank interest rate was 0.05%