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Original poster

Premium Bonds?

23 replies

Rainbowchoc · 02/03/2022 14:51

I have 10k sitting in a cash ISA making next to no interest and I am considering moving it all over to premium bonds.

I have recently opened a S&S ISA which I am putting £100 pounds a month into and I have another 1.5k in another savings account.

Are there any negatives to moving the 10k into premium bonds? I like the idea that I could win something every so often. Thanks.

OP posts:
TonkaTruckduck · 02/03/2022 15:10

It can take a few days to get your cash out, but if you have a little cushion elsewhere that shouldn't matter too much.
Don't expect to win often though....Well I never do anyway Sad

Regretsandregrets · 02/03/2022 17:35

If you invest £10k in premium bonds you are likely to get £ 25 every 3/4 months. There is a chance that you might get a big prize but otherwise while the capital is safe the value is eroded by a much higher inflation. Prizes are tax free, which is good.

DetailMouse · 02/03/2022 17:40

In lots of ways keeping assets as cash guarantees you lose money, especially while interest rates are low and inflation rising.

If you're going to keep it in cash, Premium Bonds are as good as anywhere imo. You might get no "interest" at all, but at current rates that won't make a huge difference to you and you have the possibility that you might do better than standard interest rates. So it does carry some risk, but what you risk losing is minimal.

senua · 02/03/2022 17:41

It might be worth waiting until 6th April to see if anybody is offering a tempting rate of interest on the ISA.
You have to have a fairly large sum invested in Premium Bonds to actually get the average rate of return (currently 1%), otherwise it's a bit hit and miss.

Kitkat151 · 02/03/2022 17:41

I’ve got 3500 ....I won 3 times last year....2 the year before and 4 times in 2019....£25 each time

feelingannoyed1 · 02/03/2022 17:43

I have about 20k in premium bonds and I can go for 6 months or so and win nothing and then I can win £25 or £50 every month for 6 months. I think the most I've won is £125. I have the app and it's fun to open it on prize day to see if you've been lucky or not!

I've started to save some money each month for my kids in their own premium bond accounts and although there's not much in there yet one of them has already got £25.

Sunnyday321 · 02/03/2022 17:45

I had maximum pbs . Won £25 in Jan , £0 Feb , and £100 for this month .

Fridafever · 02/03/2022 17:47

It’s at least safe. I put 17k into a stocks ISA 3 months ago and it’s currently worth about £16.2k.

Jdiosmio94 · 02/03/2022 19:06

Premium bonds are a poor man's lottery in my opinion, the average winnings result in an interest rate equivalent to an ISA, essentially you lose money as your savings don't keep up with inflation. Invest that money in the s and p 500 with someone like Vanguard. On average you should see returns of between 8-10% a year. Only reason I wouldn't advise this is if you need quick access to the money, whilst it's easy to retrieve if you're only looking to save short term you could make a loss. But in the 2 years I've had mine my average return has been close to 30 percent with regular monthly contributions, was higher but has taken a hit since the invasion of Ukraine.

JamMakingWannaBe · 03/03/2022 15:29

My Grandparents invested £50 in PB for me in the early 80s. I've never won a thing, and after 40 years my investment is now worth .... £50.

If they'd put it in a bog standard savings account paying 5% interest, it would be worth £365 today.

If they'd invested it in the stock market, who knows but my S&S ISA is up 22% in a year.

cptartapp · 03/03/2022 15:49

I won £1000 off £10k in Premium Bond after a few months, plus when I had a little more in I won £25 quite regularly.
Nothing for the last three months though, but I'm quite happy to leave it in there.

mrsbyers · 03/03/2022 17:15

I’ve had mine for just over a year and have achieved 5.5% interest including one £1,000 win

WobblyLondoner · 03/03/2022 17:31

Sweet FA for all 3 of us :(

Scottishgirl85 · 03/03/2022 20:25

With 'only' 10k you're likely to go a lot of months without winning anything. But it's a good secure place to keep money short term.

Eggshausted · 04/03/2022 13:26

We have £30k in a savings account, £30k in an ISA, and £30k in premium bonds. Over the last 10 years, returns for all of them, Premium bonds are winning. Usually get at least £100 a month from the bonds. One month was £500. ISA also pays out more than the savings account.

Jdiosmio94 · 04/03/2022 14:28

@Eggshausted

Please see a financial advisor, it kills me seeing people keep their savings in banks and low interest cash ISA's, it's not for me to tell people how to look after their finances but your £90k could be doing a hell of a lot for you if it was invested in something, even a low risk account would give you far greater returns than any of those you mentioned.

Carpediem15 · 04/03/2022 15:15

@Eggshausted

We have £30k in a savings account, £30k in an ISA, and £30k in premium bonds. Over the last 10 years, returns for all of them, Premium bonds are winning. Usually get at least £100 a month from the bonds. One month was £500. ISA also pays out more than the savings account.
You are lucky with PB's. We both have 50k holding and this month we won £25 each. Feb 1 £25 Jan - £75 between us and nothing in December.
Scottishgirl85 · 04/03/2022 15:24

@eggshausted are you sure you're winning at least £100 every month on PB? This would be 4x the likely odds every month! You should expect £25 a month when averaged out with £30k.
With the OPs £10k, they'd only win £25 every 3 months on average with average luck. Of course there is always the chance of a big win!

nannynick · 04/03/2022 15:28

Well done for opening a S&S ISA and putting money in to that. Long term, equities will be what generates growth.

What is your £10k in the Cash ISA for... what is it's purpose? If it is an emergency fund then some of it should be immediately accessible, and the remainder available quickly. Cash ISA or Premium Bonds is often used for this purpose in combination with a bank account / savings pot as the money in the bank can be accessed via debit card and the money in the Cash ISA or Premium Bonds can be withdrawn in under a week.

If the money is a long term investment, then use Pension and S&S ISA. Pension wins mathematically nearly every time, but is age restricted. S&S ISA is accessible, can take a little while for money to be available as the stocks need to be sold and then the cash taken out.

Give your money a name - a purpose. Emergency fund, new car in 3 to 5 years fund, kitchen remodel in 5+ years time fund, whatever the purpose give it a name and consider the timescale. That will then help you to determine if the money should be in cash, or should be invested.

ClemFandangoo · 04/03/2022 15:29

We put just over double that in and over a year we’ve won about £100, which is pretty poor and less than we’d get in a high interest account.

I realise we’ve been unlucky but still. Considering taking it out now.

Fridafever · 07/03/2022 09:02

I put money into S&S ISA this year and have lost £1000 (about 6%) so far. Makes my premium bonds (up about 1.5%) look like a good deal at the moment.

GeneLovesJezebel · 07/03/2022 21:53

I have never won a penny in 50 years of owning PB’s.

Porfre · 07/03/2022 22:13

I've got almost full holdings, and usually win between 25 and 50 a month.

Sometimes nothing.

What a waste.

Luckily buying a house so can actually use that money now rather than it losing value every day.

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