premium bonds

[banditboy]

we have a small endowment due to pay out soon,
and were wondering if buying premium bonds were a good idea, we dont need any of the money until next year,and i assume that it will be worth the same when we withdraw it,
anyone have dealing with bonds,or any other suggestions

 

[JohnD]

the return on premium bonds is, on average, quite poor (they calculate it as a not-very-good interest rate, and put it into the prizewinners pot.)

Most likely you will get a few £50 prizes.

However there is an tiny chance that you will be lucky enough to win a million. You may as well ignore that.

But it is the safest place to put your savings, confident in the knowledge that it will still be there when you want to draw it out, and it will not drop in £££ value. That's its biggest attraction.

There is no income tax on any winnings, and you don't even have to put them on your tax return, which might save a bit of effort over other investments.

 

[banditboy]

thanx for the quick replies...

i will have a look on the web ..re buying bonds

 

[mattylad]

Thing with bonds is that at the end of the year, unless you have won - you have exactly the same amount.

I'd have thought ISA's may be better.
And if you each get one now, you can get another in April.

 

[str]

I bought the max I could in premium bonds as wasn't overly confident about my bank!

Have won every month (only had them for 3 months), getting £50 for the first 2 months each and then £200 this month - not bad

On the flip side, you may win nothing but at least your money is safe

 

[tim west]

had bonds for over 50 yrs and never won once!

 

[adwt2004]

Due to the low base rate premium bonds prizes have been drastically reduced with fewer prizes on offer. Better off putting it into property or very soon the stock market. Things don't bottom forever.

For utter safety an isa from HSBC, Northern rock or rbs is best but for me the above two appeal more. Have to be willing to lose it as well as gain on the investment though with the two above. Takes a lot of bottle to go for it, but offer the biggest gains in the long run.

 

[AndrewSchofield]

This may help?

http://www.moneysavingexpert.com/savings/premium-bonds-calculator/

Basically if you've got a large sum to invest then, as str says above, you're likely to get a return every month, but whether your overall return will be more than you would have earnt in interest in an ISA is not certain. There is always the chance that you'll win £1m which would be nice!! Suppose its a bit like playing the lottery only you don't lose your stake money - even if you don't win! I bought 100 worth of bonds for my son when he was born, in just over 2 yrs he's won £50 which on an investment of £100 isn't bad! But that was before the interest rate, and therefore the chances of winning, dropped through the floor.

 

[Trazor]

had bonds for over 50 yrs and never won once!

You need to have more than one..............

 

[swidders]

The amount you win is directly proportional to ... how lucky you are

 

[Trazor]

The amount you win is directly proportional to ... how lucky you are

But the number of times you win, is virtually proportional to the number of bonds you hold.....

 

[swidders]

The amount you win is directly proportional to ... how lucky you are

But the number of times you win, is virtually proportional to the number of bonds you hold.....

If you're lucky

Love your keep out of an argument "joker card" by the use of the word "virtually".

 

[WDIK]

The amount you win is directly proportional to ... how lucky you are

not entirely true.

the chances of winning from 1 bond can be calculated.

say it were 10,00/1

however owning 10,000 bonds wouldn't mean you would win

 

[swidders]

the chances of winning from 1 bond can be calculated.

say it were 10,00/1

however owning 10,000 bonds wouldn't mean you would win

Unless you were very, very unlucky

 

[WDIK]

you should know this.

its 10,000 individual bonds with a 10,000/1 chance or probability