Info on premium bonds

[Ladyof]

Apologies for my ignorance but can anyone tell me in simple terms about premium bonds.

How they work, is it long term investment, risky, how do I open them etc.

Thank you

NS&I offer premium bonds. You can deposit up to £50,000. It's basically like a lottery, the more money you invest, the more 'lottery tickets' you have, and more chance you have of winning up to £1m (but there are also easier to win smaller cash prizes of £25, £50, etc). It's very safe because your investment can't go down, and money deposited with NS&I is backed by HM Treasury. With interest rates as they are, it's not a bad bet.

The only prizes are now £25 or £1 million.

You might get more responses posting in the Money section.

They are not a stock market investment so the only risk to your money is inflation - ie they will loose money over time. They do not pay any interest but once a month, all the numbers are put in a prize draw.

My grandparents bought me £100 worth (in the 70s) and I've won hee-haw. You can invest up to £50k. You can open them on the Premiums Bond website.

Head over to Money/Investing and tell us your savings aims.

There is no risk.
It is all Gvmnt backed.
Very simple to open

Statistically the odds of winning the £1million are very low BUT, once you have bought the bond, that number goes into the draw every month, without ever having to buy a 'ticket' again, so far better than the lottery, and it has to be 'someone' every month.

Then, when you want your money you can just take it out again, very easily and it is with you within a couple of days. You can take part of it out or all or a bit or a lot.
You can invest from £100 up to £50000

Statistically, if you invest £50 000 (the max you can invest) you win enough small prizes to make you better off than sticking that £50K into any savings account at the moment. You can probably earn more in riskier investments (eg stocks and shares) BUT there is no risk of losing your money with them.
Of course that is only "statistically" - there is no guarantee you will win ANY prize, ever. But equally, you could win a lot more than you would earn in interest.
Interest rates are pants at the moment, so my philosophy is put it in Premium bonds and dream big

Info here

You can read about the prize allocation here: www.nsandi.com/get-to-know-us/monthly-prize-allocation

I just finally got round to buying some in February. You literally set up an account, send a debit card payment and set up the online stuff, and then after that you can just bank transfer in.

I’ve got about £20k in now and just won £25 this month, which is probably better than the ridiculous rates on my savings accounts (even my ISA is now 0.05%!)

You can withdraw whenever, add in whenever - it’s just a savings account. Wish I’d put my savings in it ages ago to be honest - now badgering DH to move all the savings from his account too.

@MissFritton65

The only prizes are now £25 or £1 million.

That’s not correct is it? The link above states it isn’t, unless it will change shortly?

I joined in January, I put in £10k and I’ve won £25 every month so far, which is better than the Marcus account I was previously using for savings.

Try nsandi.com/products/premium-bonds for info and how to buy etc.

Google Martin Lewis premium bonds - he has a video discussing if they are a good investment or not.

No risk, in terms of you will get back what you put in (and potentially more, if you win), but long term, possibly not so good eg. £500 today will more than likely/definitely buy more than £500 in 5, 10 or 20 years time.

www.mumsnet.com/Talk/legal_money_matters/4237465-PREMIUM-BOND-THREAD?msgid=107213287

We have a thread.

No. That's not right.

They draw
2 x a million
5 x 100, 000
9 x 50, 000
20 x 20 000
49 x 10 000
96 x 5 000
1763 x 1000
5292 x 500
28673 x 100
28673 x 50
3,000,003 x 25

Some incorrect information here.

You can invest from £25, up to £50k.

Each £1 you invest buys you a bond number, so £10k would be 10k numbers entered into that months draw. You can withdraw the investment any time you like, it takes 2-3 days.

The prizes start at £25, but you can win more than once in each draw. Example 3 x £25 in one month.

Risk free but you are never guaranteed to win and you don’t earn any interest.

We need access to our savings as they’re for buying a bigger house in the next year or so - can’t tie it up in anything and can’t earn decent interest anywhere so it’s perfect for us. If you want to invest longer term then I’m sure there are better options.

Apologies I am wrong! Both my husband and I have had the maximum amount for 6 months (proceeds from a house sale and need to access quickly in order to pay for building work) and have only won multiples of £25 but have both had at least £25 each month.

@JamMakingWannaBe

You might get more responses posting in the Money section.

They are not a stock market investment so the only risk to your money is inflation - ie they will loose money over time. They do not pay any interest but once a month, all the numbers are put in a prize draw.

My grandparents bought me £100 worth (in the 70s) and I've won hee-haw. You can invest up to £50k. You can open them on the Premiums Bond website.

Head over to Money/Investing and tell us your savings aims.

I selected for it to go into money but for some reason the app always defaults into this, it is a pain!

Thanks for your responses everyone I appreciate it!

@MissFritton65

The only prizes are now £25 or £1 million.

Do you just make stuff up?

No risk at all. You may make a decent return or not, you may even win a lot.
I have the maximum £50k in premium bonds and get something back every month. This month it was £125.

Premium bonds are not an investment, they are a form of saving.

In effect, the (small) amount of interest goes into a lottery which has a large number of small prizes, and a very small number of large prizes.

As the prizes are random, with a small number of bonds you will probably win nothing. If you have the max £50,000 you will probably approach 1% return in an average year.

Or you might be more lucky. Or less.

You will probably not keep pace with inflation, because it is not an investment.

It's not guaranteed but We've got close to max amount in and over last 6 months is running at 1.3% it's much more than standard savings and fun too, getting prizes each month thinking they could be the big one!
I don't think you get much for tiny amounts (but you could)

Go for it - we've got around £10,000 in and have won £150 or so a year for the past few years (lots of £25 prizes, nothing more) which is more than the 1% we might be able to get in a savings account etc and as others have said the money is secure and is credited to the current account withing 4-5 days when you cash them in. Best to buy them on the last day of the month as they need to have been held for one complete month before they are entered into the draw.

Similar to others I was bought some when I was born in the 1970s - I think £20 worth- and have never won anything on that. This is equivalent to around £200 today if it had kept up with inflation.

Go for it - we've got around £10,000 in and have won £150 or so a year for the past few years (lots of £25 prizes, nothing more) which is more than the 1% we might be able to get in a savings account etc and as others have said the money is secure and is credited to the current account withing 4-5 days when you cash them in. Best to buy them on the last day of the month as they need to have been held for one complete month before they are entered into the draw.

Similar to others I was bought some when I was born in the 1970s - I think £20 worth- and have never won anything on that. This is equivalent to around £200 today if it had kept up with inflation.

Go for it - we've got around £10,000 in and have won £150 or so a year for the past few years (lots of £25 prizes, nothing more) which is more than the 1% we might be able to get in a savings account etc and as others have said the money is secure and is credited to the current account withing 4-5 days when you cash them in. Best to buy them on the last day of the month as they need to have been held for one complete month before they are entered into the draw.

Similar to others I was bought some when I was born in the 1970s - I think £20 worth- and have never won anything on that. This is equivalent to around £200 today if it had kept up with inflation.

Can I temporarily buy bonds in children’s names with money from house sale and then take out when I find a house to buy? Is that allowed? Both me and DH have full holdings.

Yes of course, I've got some in kids name, they are older though and I've had the chat with them that this is not their money and is a family pot whoever wins!