Premium bonds

[RizzoTheRat]

Does anyone bother with them any more? My mother recently dug out the details of some premium bonds I was given as a christening present. I've just checked the details and my massive investment of £23 hasn't won anything in 40 years. Looking at the calculator on moneysavingexpert it looks like there's only about a 10% chance they'd beat a 1.5% ISA

[Mandat]

The wife and I both have PB's and over an average year, we receive approx. £50-£75 return per month.

[Simpo Two]

Mandat said:

The wife and I both have PB's and over an average year, we receive approx. £50-£75 return per month.

Meaningless without knowing the holding though; you need a %age.

I've had PBs for about 8 years; probably do about 2%. But the money is safe, and the lottery addicts say, you might get a big one. Except I get my premium back if I lose. Is it exciting? No. But it's more exciting than cash.

[TwigtheWonderkid]

RizzoTheRat said:

Looking at the calculator on moneysavingexpert it looks like there's only about a 10% chance they'd beat a 1.5% ISA

True, but there's a remote chance you could get a massive return on your investment, which is impossible with an ISA.

[Ozzie Osmond]

Premium bonds give a poor average rate of return unless you hit the jackpot - which is almost inconceivable. The big winners take so much of the "pot" that there's very little left for anyone else.

You can get 1.6% guaranteed from Tesco (or do a cash ISA) and just buy a lottery ticket every week.

[33q]

Personally I like the idea of finding £25 on the doormat a couple of times a month

All interest rates are poor at the moment so to me it's a good place to put some cash

[Ginge R]

Horses for courses. If you want guaranteed, regular returns that'll beat inflation, they're not for you. If you want complete institutional safety for your money and the chance to win a big prize, then you might be more drawn to them!

[PositronicRay]

I get a little back. I just use them as a (short term) way of dumping cash for a yr or so, till it gets spent or reinvested.

[Ozzie Osmond]

Solely for optimists IMO.

If you want confirmation that they're a lousy investment, read this link,

http://www.theweek.co.uk/63282/premium-bond-change...

[BoRED S2upid]

We have them and they perform better than a cash ISA (only because interest rates are so low) plus there I'd that element of surprise when you do win something nothing fun about reading your monthly ISA statement and seeing how much it hasn't gained that month.

[droopsnoot]

I have some, I get around 0.95% AER generally. I've never won a big prize, but there's an outside chance that I might, so for me it's worth keeping them. It's not a good place to stick all your savings, there are better returns to be had, but it's not bad as part of a selection (I don't want to use the 'p' word).

[sideways sid]

I hold my tax in PBs.

The return is low, but any prizes always feel special as its a tax-free prize on the money that hasn't yet been paid to the tax-man!