Premium Bonds

[Dr Phibes]

Looking at purchasing £30k of premium bonds, just wondering if anyone believes it is better to purchase in one block of £30k or in a number of blocks, say 3 of £10k etc.

Or does it make bugger all difference?

[che6mw]

should make bugger all difference. Technically each share has an equal chance of winning. Anyway, you might not have the choice - whenever i've bought a large amount of premium bonds they have never been issued as one solid block to the value of my investment, but lots of little bits making up the total of how much i've bought (on one occasion I got about £4k in £50-£250 bonds which was a bit irritating).

Edited by che6mw on Thursday 1st November 12:47

[JustinP1]

Dr Phibes said:

Looking at purchasing £30k of premium bonds, just wondering if anyone believes it is better to purchase in one block of £30k or in a number of blocks, say 3 of £10k etc.

Or does it make bugger all difference?

I have heard that they are luckier with my name on them if that helps?

[clubsport]

I have mine spread out...last it year worked well....6% approx return.....this year about 1%.....all the luck of the draw!

[andybuk99]

Why put them into premium bonds? Better off in a high interest account.

[clubsport]

andybuk99 said:

Why put them into premium bonds? Better off in a high interest account.

There is that chance you can win one of the larger tax free prizes, in theory you should earn close to high street savings rates (considering tax) and it is probably a safer place to have your money than a Northern building society.

[che6mw]

andybuk99 said:

Why put them into premium bonds? Better off in a high interest account.

Assuming average luck the return on £30k of premium bonds is 4% tax free a year. Find me a high interest savings account which blitzs that (assuming higher band tax payable on interest earned).

Personnally I think premium bonds form a good part of any investment portfolio (personal opinion - I'm not an financial advisor). Plus, you never know you COULD see a big return ....

[andybuk99]

Stick the money in a 6.4% account and you would earn about £1100 in a year. The probability of winning that on the premium bonds is around 30%. Premium bonds are ok if you have the spare cash and like the idea of a bit of a gamble without actually loosing. But it isnt any good as an investment.

[shadowninja]

I've got a lot in Premium Bonds. Last 6 months has won me £50. The last 12 months has won me £150.

[clubsport]

andybuk99 said:

Stick the money in a 6.4% account and you would earn about £1100 in a year. The probability of winning that on the premium bonds is around 30%. Premium bonds are ok if you have the spare cash and like the idea of a bit of a gamble without actually loosing. But it isnt any good as an investment.

They certainly have their part in a balanced portfolio....agree on high interest, easy access savings accounts for some part of savings, depends how much you have to allocate at the end of the day.

[casbar]

Got the max number of bonds this time last year. Have won around 1k over the year. Hoping for a better return this year

[che6mw]

andybuk99 said:

Stick the money in a 6.4% account and you would earn about £1100 in a year. The probability of winning that on the premium bonds is around 30%. Premium bonds are ok if you have the spare cash and like the idea of a bit of a gamble without actually loosing. But it isnt any good as an investment.

Average return on premium bonds is 4% and the return on the high interest account you mention above is slightly below this. Admittedly the high interest account is guaranteed income BUT the premium bonds, on average, shouldn't be far behind AND the upside potential is enormous.

[JustinP1]

shadowninja said:

I've got a lot in Premium Bonds. Last 6 months has won me £50. The last 12 months has won me £150.

My Dad has had them for a year. His return was 5%.

That is about £500 from his £10k. He just likes to think he has the chance of winning the big stuff I think!

[shadowninja]

Well, my thinking is that I could win big and I don't need the money right now so it might as well stay there.

[Welshbeef]

andybuk99 said:

Stick the money in a 6.4% account and you would earn about £1100 in a year. The probability of winning that on the premium bonds is around 30%. Premium bonds are ok if you have the spare cash and like the idea of a bit of a gamble without actually loosing. But it isnt any good as an investment.

Well £30,000 @ 6.4% is £1920 less 40% tax = £1152
£30,000 @ 4% tax free is £1200.


If you want to compare Gross with Gross then the 4% P Bonds are in effect returning 6.66% - however if your a lowr tax payer its gross is only 5%. So as with pensions PB benefit the higher tax payer - odd this Labour govt.....

[Dr Phibes]

Thanks for the input so far, so it would seem that buying in a £30k bulk rather than batches makes naff all difference.

I have another allocation of funds that i will be investing in a higher interest account so happy to take a "gamble" on premium bonds and see what lady luck has in store for me, bugger all i should imagine but lets see.

[Welshbeef]

Dr Phibes said:

Thanks for the input so far, so it would seem that buying in a £30k bulk rather than batches makes naff all difference.

I have another allocation of funds that i will be investing in a higher interest account so happy to take a "gamble" on premium bonds and see what lady luck has in store for me, bugger all i should imagine but lets see.

Remember your gambling the interest you could earn £1200p.a. in the bank account and you could lose this in a year given no winnings.

[andybuk99]

You might want to look at this
http://www.moneysavingexpert.com/savings/premium-b...

Oh and the 4% you keep going on about isnt gauranteed is it.

Edited by andybuk99 on Thursday 1st November 15:24

[Welshbeef]

andybuk99 said:

You might want to look at this
http://www.moneysavingexpert.com/savings/premium-b...

Oh and the 4% you keep going on about isnt gauranteed is it.

Edited by andybuk99 on Thursday 1st November 15:24

No it is not.
What tends to happen is when you buy them you tend to win a few times early on and then time goes by and nothing & you keeping living on hoping for it to come along and before you know it your interest rate is pants.

Yes of course some people do win big but its like the lottery, safer than equity in the gamblng sense but as inflation is 1.8% you need to ensure that your cash isnt depreciating

[srebbe64]

I've got £30k of Premium Bonds. I've just checked the last 6 months on the NS&I website and, here goes (cut & paste):

The Premium Bond prize checker shows any prizes you may have won in October and the past six draws, along with any prizes unclaimed from previous draws. We normally update information on prize-winning Bonds by the third working day of each month. If you have won a prize this month, we will automatically send it to you. Find out more about how and when we send out prizes.


50 October
100 September
50 September
50 September
50 June
50 June
50 May
100 April
50 April
50 April
50 April

So that's £700 over six months = £1400 annualised. So that's a tad under 5% (I think). However, it's Tax free so equivalent to about 8% I suppose.