How's your luck with Premium Bonds?

[JohnD]

"When your Premium Bonds will go into the draws

In most cases, you’ll need to hold them for a whole month before they’re eligible for the prize draw. For example, if you buy Premium Bonds any time in November, they’ll be in the draw in January.If you buy your Premium Bonds by automatically reinvesting your prizes, they’ll be in the draw the next month. For example, if you win in the November draw, then your new numbers will be in the December draw. Once a Premium Bond is eligible for draws, it will take part in each month’s draw provided you still hold the Bond on the first day of the month"

https://www.nsandi.com/files/asset/pdf/premium-bonds-brochure.pdf

 

[fillyboy]

Anyway back to premium bonds. Another 20k purchased. I expect to get "results" in next months draw.

Good luck.

 

[JohnD]

So I'm 500 quid down before I start Assuming I was getting 3% - it's only 300 after tax.

20,000 x 3% ÷ 12 is £50

 

[motorbiking]

20,000 x 3% ÷ 12 is £50

Even better £27.5 after tax.

 

[JohnD]

Assuming I was getting 3% - it's only 300 after tax.

Incidentally, the Premium Bond Prize rate has recently dropped from 4% to 3.8% tax free, so your taxable 3% was rather poor.

 

[gas112]

Incidentally, the Premium Bond Prize rate has recently dropped from 4% to 3.8% tax free, so your taxable 3% was rather poor.

oh look someone thinks that all premium bond holders win.

 

[JohnD]

oh look someone thinks that all premium bond holders win.

Really? Who is that person? Is it you?

 

[Mottie]

Really? Who is that person? Is it you?

It’s someone that compares a guaranteed rate of 3% that may or may not be taxable with a hypothetical and non-guaranteed tax-free 3.8%. So that will be you then.

 

[JohnD]

If you look again, you will see that I mentioned the Premium Bond Prize rate.

I am educated enough to know how Random Numbers work.

The more bonds you have, and the longer you hold them, the nearer you get to the average rate.

I don't usually need to hold many. When I did, I checked the annual return and it was always close to the average.

 

[Mottie]

If you look again, you will see that I mentioned the Premium Bond Prize rate.

Yes, a

hypothetical and non-guaranteed tax-free 3.8%

 

[Doug99]

Back to premium bonds. I think I originally had £5,025 worth, 5 years ago. I auto reinvest, - Current Balance is £6075 so that is 4.86% avg. Which given I pay 45% tax, is pretty good.
I was thinking they were pretty useless until I checked. I should buy some more.

Does anyone know what happens if you hold close to the limit and re-invest prize money - are you allowed prize money on top? or its total holdings? I assume the latter.

Once you reach your £50k max, all winnings are automatically paid into your registered bank account

 

[Justin Passing]

Or you could lose £1k in 10 minutes.

I appreciate there are ways to analyse whether a share price drop is a trend or a temporary dip, but for the average punter it’s hard to know.

No no no. That's ignorant rot.
You don't sit there for 10 minutes with it losing, obviously. No analysis required!
I keep having to point out it's not like a horse race. You don't commit your money. It makes no difference whether it rises or falls, either. You can trade the same stock several times a minute, either direction. The price moves as a wave, so you can predict the turning point and wait at the end of the swing

 

[Justin Passing]

Except that, long term, they mostly do worse than "buy and forget" trackers.

And you only find out which the lucky active ones are, too late.

High charging active funds are needed by the managers who pocket the fees.

Cash savings are doomed to lose.

Mindless hogwash quoted by and for simpletons.
"But and forget" trackers are ridiculously risky, you cannot compare with a managed fund. It's trolling quality garbage to do so.

 

[Notch7]

No no no. That's ignorant rot.
You don't sit there for 10 minutes with it losing, obviously. No analysis required!
I keep having to point out it's not like a horse race. You don't commit your money. It makes no difference whether it rises or falls, either. You can trade the same stock several times a minute, either direction. The price moves as a wave, so you can predict the turning point and wait at the end of the swing

That’s complete nonsense.

you said: “If you had £10k in there, popped it on, you'd have earned £1k in 10 minutes”
How would you make any money if you “don’t commit your money”?


By the way, “If you had £10k in there, popped it on, you'd have earned £1k in 10 minutes” …..is just a hindsight statement.

I agree that with analysis you can anticipate a decent probability when the turning point will be…..but you can not under any circumstances predict it.

 

[Notch7]

Mindless hogwash quoted by and for simpletons

Except it happens to be true

"But and forget" trackers are ridiculously risky

No they aren’t.

A look at the history of the ftse will tell you it has outperformed savings accounts significantly for many decades.