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Premium bonds

Discussion in 'General Chat' started by gigsta, Jan 6, 2018.

  1. gigsta

    gigsta Registered

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    Hi all
    Is it worth buying government ns&i premium bonds for years to come or am I better off investing into other things
    all comments welcome
    thanks in advance.
     
  2. cactikid

    cactikid VIP Member

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    i have got presents of prize bonds and had a few winners,my cousin has a few more and got 5 or 6 wins.
     
    gigsta likes this.
  3. teddybloat

    teddybloat Forum Supporter

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    they are government backed, so safe. but then so is a bank account [unless you have 25k+]

    they pool all the interest that would have been paid to people into a prize pool and then have lotteries to see who 'wins' the interest.

    this means the VAST majority of people will do much better in an account that accrues interest. the tiny minority will be better off.

    its a safe place to keep money and you have a small chance of winning something where the only cost of a ticket is the interest you would have received. but for the big majoirity of people even a low interst rate savings account will be better.
     
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  4. leemoo

    leemoo Registered

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    I've had my bonds for about 15 yrs...only about 100 quid though and never won anything from them. I know this is a minuscule amount!
    Obviously the more money you put in the better your chances but I thought over that time I would have won something, a tenner or a pack of pork scratchings... anything would have been nice :)
    A savings account will give you a guaranteed amount over a period of time.
    Crypto currency is something to look at but like stocks and shares this is a big gamble and can make you money but you could lose it all.
     
  5. gigsta

    gigsta Registered

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    @leemoo
    Was looking on the website at winners to proberbly win a return if you have a spare 50 grand you proberbly would win big a pound maybe not but that's the luck of the draw your odds and all that.
     
  6. mbull

    mbull TK Veteran

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    Yes and YES, all my Kids and wife and I have them, Saving are in Premium Bonds, and we win every 2nd month. So over a YEAR, we make way more than you would ever get in Interest from any bank.
    No Brainer, and you can withdraw anytime. I have a Standing Order for all my KIDS and I Setup to pay in a set amount each month.
    Won again in December, only £25.00 but that's about 4 or 5 i think this year from just the one account.
     
  7. ASHHBI

    ASHHBI TK Veteran

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    Premium Bonds are a lottery. If you’re like mbull then you are in the lucky minority. I know people who have had them years and not won enough for a tripe supper. :)
    Most money experts will tell you or stay clear of premium bonds as they drastically cut the odds of winning a few years ago.
     
  8. dangerous

    dangerous TK Veteran

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    Never won a prize and held some of mine over 40 years, I must be unlucky lol
     
  9. mbull

    mbull TK Veteran

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    I am not understanding your thinking here, you say it is a Lottery. it is not. A lottery you pay in regular, and one week or month you will either win or not, and you lose the money, never to gain anything from that one payment. Premium Bonds, you pay in, you may not win, but you don't lose the money ever. next month, you could win, next year etc, the money gets Re-used each time. SO, you never lose it, and you get the money back anytime you want.
    Most money experts will tell you or stay clear of premium bonds. Are these the same money experts that want to you to go and visit them and pay them a FEE to work out what the best place to invest your Money in. No Thanks..

    I get this email most months from them.
    News from ERNIE about your NS&I Premium Bonds -
    5 Jan (4 days ago)
    You have some good news from ERNIE about your Premium Bonds! We have sent you a new secure message giving more details. Please visit nsandi.com and log in to read it

     
  10. teddybloat

    teddybloat Forum Supporter

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    The cost is the interest / returns you could have accrued by investing somewhere else.

    The number of people doing better than even a bog standard interest rate is tiny compared to those who gambled their interest and have had zero return.

    you are a statistical outlier mate. On the distribution of premium bond holders you are at the extremely lucky end. No one should extrapolate expection from your experience
     
    deanmitch likes this.
  11. mbull

    mbull TK Veteran

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    Well, the odds are pretty high for most i know that use Premium Bonds.
    My Parents, Brother and Many Friends etc are getting returns of average £100 a YEAR on there Account. I have no knowledge of any other place i can put my money in with no fees, no Tax and can take it out at any stage i want. While gaining money every month that gets re-invested each time i win. At the same time, one day, i could win a Million & take it Tax Free &, still have the money i put in un-touched.
    You do need to have a good amount in to gain from this, so that is something to consider when you are winning every couple of months..
     
  12. ASHHBI

    ASHHBI TK Veteran

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    mbull. If I send you some money will you buy my premium bonds for me as you must be a lucky omen.LOL. :thumbsup:;)
     
    mbull likes this.
  13. mbull

    mbull TK Veteran

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    lol, Sure... Not a problem, I'll PM you the Address to send me the CASH. Min 25k in 100 Notes only. There will be an ADMIN FEE included to lol..
     
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  14. ASHHBI

    ASHHBI TK Veteran

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    We all have our opinions on this.
    I agree with the freely available financial advise that premium bonds are not a great investment and if you win regularly then you have the luck compared to some people. Whilst I mentioned its a lottery is wasn't meant to mean like playing the lottery but more on a general term of its a lottery if you win.

    No problem. Buy me the Bonds and I will use western union to send you your cash when I get the bonds.:thumbsup::D
     
    Last edited by a moderator: Jan 17, 2018
  15. teddybloat

    teddybloat Forum Supporter

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    The bonds don't rake the pot, to use a gambling term, so your expected return long term is exactly the same as the base rate of the bonds.

    But to achieve that you would be looking at many lifetimes before your actual returns match your expected returns.

    Also it is a zero sum game. Your winnings have come at the expense of other bond holders - for every winner there are many losers.

    Consider the case of holding 1k with an interest rate that pays 20 quid per year. That means that every time someone wins 1million they win the years interest of 50,000 people holding 1k of premium bonds. Every time someone wins 100 quid there is the annual interest of five people holding 1k.

    For every small winner there are many losers, for every medium winner there are lots of losers and for every big winner there are a shit tonne of losers.

    You literally win other people's interest.
     
    Last edited: Jan 9, 2018
    leemoo likes this.
  16. reyvader

    reyvader Registered

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    I've done okay with Premium Bonds over the years, as others say though you need to hold a substantial amount to win anything. Yes, in real terms your money makes no interest but it's a great feeling when you win as well as being able to easily access your money anytime if you need it.

    Whether you have bonds or not, I find this tool really useful - Premium Bonds Probability Calculator - https://www.moneysavingexpert.com/savings/premium-bonds-calculator/#result

    This will give you the probabilities for what you could expect to win with the number of bonds you hold.
     
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  17. Pilf

    Pilf Registered

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    If you are investing for the long term, stay well clear of these unless you intend to reinvest anything that you 'win' and even then, stay clear imo.
    The reasons are very simple, firstly, you are losing money to inflation every year, so £1000 invested last year would be worth £970 this year (although it will still be £1000 of course).
    Secondly, compound interest, your £1,000 in a 2% paying account would be £1020 after 1 year, after 10 years it would be over £1200. The longer you invest, the greater the impact of compound interest.

    As boring as it sounds, especially if you want to invest regularly, the stock market is the best place to go. A balanced portfolio will likely outperform pretty much any other investment over a decent enough timescale, unless you are prepared to take huge risks which is basically gambling.
    By all means invest in Crypto currencies or other blockchain related technologies which are the talk of the town, but that is also the gambling I mention above, you could increase your investment 100+% for 5 years in a row, but if you didn't diversify, it could all vanish in an instant.
     
    bangord30 likes this.
  18. deanmitch

    deanmitch Registered

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    diversify, diversity, spread the risk, premium bonds should be considered part of any diversified portfolio IMO,along with stocks and shares in a isa, interest paying bank accounts , regular saving accounts, even physical gold !, but also you should consider paying off high interest debts/loans etc !! not point in earning 1.5% interest on savings if you are paying 20 % interest on debts!, I like p bonds as I consider it a flutter with the advantage of getting my money back if I don't win unlike the national lottery :)
     
    mbull likes this.
  19. mehmood

    mehmood Registered

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    you win only £25 thats all. thets is your interest . i never wone more than £25. having bonds for 20 years
     
  20. gigsta

    gigsta Registered

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    Martin Lewis explained some content on premium bonds/cash isa's on this weeks money show aired this monday 15th 8pm on itv.