How's your luck with Premium Bonds?

[Highway Man]

I don't think you can lose your initial amount (could be wrong)

But you might win big or you might win nothing....I think.

Pretty much pointless then

 

[MNW67]

Pretty much pointless then

Premium bonds are run by the government and are massively popular. The British public own more than £100 billion worth. Your bonds go into the draw every month. Each bond can win anything from £25 to £1 million. But the odds on the biggest prizes are astronomical. The average return is currently 3.8% and is tax free. Some will do better, others will do worse. I never seem to have much luck! If you invest £10,000, then that money is totally safe. You can cash it in at any time. I think most people automatically invest their prizes in new bonds, so your pot grows, a bit like a savings account. If you are worried about moving money, you can buy just a few to start with, to make sure your account is properly set up and everything is working as it should.

 

[Highway Man]

I just want somwhere safe to park my money and use it to save a bit more than I do.

 

[MNW67]

I just want somwhere safe to park my money and use it to save a bit more than I do.

Premium bonds are safe in that you won't lose your investment. But the return isn't guaranteed.

Do you use ISAs?

 

[Highway Man]

Premium bonds are safe in that you won't lose your investment. But the return isn't guaranteed.

Do you use ISAs?

No I have nothing other than myy bank account, I am not money savvy at all

 

[Mottie]

I just want somwhere safe to park my money and use it to save a bit more than I do.

If you want instant access, try the post office. Currently 4.4% so as long as it stays the same, you'd earn. £440 in a year and you can take it out any time you want. There are others paying slightly more but you’ve probably never heard of them.

 

[MNW67]

No I have nothing other than myy bank account, I am not money savvy at all

An ISA is a tax free savings account. Currently you can put £20,000 in each tax year. Some accounts have a fixed interest rate, some are variable rate. I have a few. I usually go for a well established British building society or bank. That might mean a slightly lower interest rate than the best rates, which might be with a foreign bank. With variable rate accounts you can get your money out any time. With fixed rates you might have to pay a penalty.

 

[Highway Man]

If you want instant access, try the post office. Currently 4.4% so as long as it stays the same, you'd earn. £440 in a year and you can take it out any time you want. There are others paying slightly more but you’ve probably never heard of them.

This sounds better for what I am looking for, I want to start saving more regularly and spending less than I do. If it is in my bank, I just cant help myself.

 

[pete01]

Did I read right? the premium bonds usually pay 3.8%? With average luck?

But theres always a chance for the big one...you never know I suppose.

 

[Highway Man]

Did I read right? the premium bonds usually pay 3.8%? With average luck?

But theres always a chance for the big one...you never know I suppose.

Don't get suckered in, tell you what. Send me your 5k and I might send you £25 or whatever some time.. Maybe even a million you never know.

 

[MNW67]

This sounds better for what I am looking for, I want to start saving more regularly and spending less than I do. If it is in my bank, I just cant help myself.

Bad habit!

It looks like with that Post Office ISA it has a low standard interest rate (1.25%) and a large bonus rate (3.15%). This brings the total interest rate to 4.4%. The bonus rate lasts for 12 months. This usually means that after 12 months you need to remember to open a new ISA with the Post Office and move your savings into that new account. Otherwise your interest rate will take a big drop. Is that right @Mottie?

 

[Highway Man]

Bad habit!

It looks like with that Post Office ISA it has a low standard interest rate (1.25%) and a large bonus rate (3.15%). This brings the total interest rate to 4.4%. The bonus rate lasts for 12 months. This usually means that after 12 months you need to remember to open a new ISA with the Post Office and move your savings into that new account. Otherwise your interest rate will take a big drop. Is that right @Mottie?

OMG this is so complicated, I didn't realise it was so problemsome. I always thought having money would be stress free. I am assett rich but cash poor.

 

[MNW67]

Did I read right? the premium bonds usually pay 3.8%? With average luck?

But theres always a chance for the big one...you never know I suppose.

Yes, that's about right. But most people will actually get less than that, to average out for the lucky few who get the big wins.

 

[MNW67]

OMG this is so complicated, I didn't realise it was so problemsome. I always thought having money would be stress free. I am assett rich but cash poor.

With these bonus accounts you just need to give yourself a reminder to take action when you get close to the anniversary. You should get an email and/or letter telling you that the bonus rate is expiring. It is a pain. They rely on people forgetting!

 

[Mottie]

Bad habit!

It looks like with that Post Office ISA it has a low standard interest rate (1.25%) and a large bonus rate (3.15%). This brings the total interest rate to 4.4%. The bonus rate lasts for 12 months. This usually means that after 12 months you need to remember to open a new ISA with the Post Office and move your savings into that new account. Otherwise your interest rate will take a big drop. Is that right @Mottie?

Basically yes but our one is not an ISA, it’s just a savings account. We have used up our ISA allowance for this year. We will be moving £20k into an ISA each next week when the new ISA year starts. We have numerous ISA's and we only ever fix them for a year so we ditch and switch every time our ISA's mature.

As I understand it, if you are a basic rate taxpayer, it’s not worth looking at ISA's unless you have exceeded your personal savings allowance of £1k so perfectly fine if you (currently) have up to @ £25k ish in standard savings. Usually, rates are better with savings accounts than ISA's but you’ve probably need to keep an eye on their rates and move when a better one comes along. It’s not hard and no more difficult than say, buying something online.