Premium bonds

[madasamarchhare]

Considering buying some and was wondering how they work. I understand you invest a minimum of£100 I presume this gives you one bond number? Then a draw is made every month. Do the prizes escalate from small to large? How do they pay your winnings?

Your £100 buys you 100 bonds. Each bond (number basically) has a chance of winning each month. If you win they send you a cheque ( though it has a special name.)

If you win big they send you a special form , which you fill in then they send you cheque- fraud prevention I would guess.

If you win the £1 million , I believe they send someone out to meet you instead of sending cheque !

Smallest prize is £25 then they go up to £1 million. Your bonds remain in each draw unless you sell them.

Each bond has about 1 in 24,000 chance to win each month , so with £100 you would on average win once every 20 years , but obviously you might win 4 months in a row , as it's random

Also you can get your money back at any time by selling bonds back for same price you bought for , and I think that takes a couple of weeks.

Ok thanks that's everything I needed to know! I've been looking online and as you say the odds of winning anything are not actually that great so probably better in a savings bond elsewhere.

We use them as a relatively quick access, safe way to have savings , with the added little bit of excitement of maybe winning each month.

But they don't end up giving much return so you can def get more interest elsewhere.

I may purchase a few hundred as you say they are safe and we might win!

they are 'safe' in that they only get wrecked by inflation.

don't use fixed rate bonds at the moment, rates are pitiful. Set up current accounts where you can get up to 5%.

I've had premium bonds since I was a child and I'm 50 now. Never won a penny!

you're me!

Had some for about 5 years, won £25 !

We bought £2000 and was winning a couple of times a year. They then brought the odds down and we stopped winning so sold them. Typical, in the month notice we won again

I have about £3000 in bonds and tend to win £25 a couple of times a year
I buy £50 worth a month ( on a standing order )
DD has £100 in bonds , and won £100 once

Your questions have all been answered in the first reply, but I'm adding my voice to those saying to go for it.

Interest rates in savings accounts are so pathetic at the moment, you'd not be losing a lot in interest even if you never win.

All my dc have won though - 2 of them twice. Just £50 and £25, but that's not a bad return on a £300 investment. Then there is that glimmer of hope that one day you'll win something big. Agreed, statistically unlikely, but that doen't seem to stop people spending ££ on the lottery each week. With the lottery you don't get your stake money back of course, like you do with Premium Bonds.
Older froends of ours have the maximum investment allowed, and they win something every month - the certainly do better than they would by sticking that kind of money in a savings account.

My son has had £100 since 2003 and has never won a penny

The fund currently pays out at 1.35% (according to their website). If you only hold a few bonds then it really is pot luck but if you hold enough then you do start to win prizes at the average rate.
It's all tax free so I believe that it's quite popular with higher rate taxpayers because it beats normal 'interest less higher rate tax'.

My DD has premium bonds she is 5, and so far has won around £700. She has about £800 in bonds. You can opt to invest winnings and turn them into more bonds or they send you a cheque.
I think it's about 10 days to cash them in if you want some back.