Premium bonds

[dickie davies]

Still can't get my head around why people invest in these, unless they're just part of a wider portfolio

Chances are that the vast majority of people will lose money by investing in these over the stretch of 5-10 years

When I first invested it was my self employed tax money that I didn't need for six months, then it became a "fun" investment
I have 10k invested and its now my emergency fund, if I ever need cash relatively quickly
When bank saving interest rates were at 1%, and if you were cash rich, you may as well have dumped 10k in and treated it like you would the lottery
If I won £100 in a year, that was break even. If I won nothing, it was the equivalent of £2 a week, less than the cost of a Euromillions ticket
I won £500 this month, which is the equivalent of a 5% return, the same as my two year cash isa

 

[chris85mcfc]

When I first invested it was my self employed tax money that I didn't need for six months, then it became a "fun" investment
I have 10k invested and its now my emergency fund, if I ever need cash relatively quickly
When bank saving interest rates were at 1%, and if you were cash rich, you may as well have dumped 10k in and treated it like you would the lottery
If I won £100 in a year, that was break even. If I won nothing, it was the equivalent of £2 a week, less than the cost of a Euromillions ticket
I won £500 this month, which is the equivalent of a 5% return, the same as my two year cash isa

Money loses value over time, so if you're not beating inflation with your winnings, you're effectively losing money

I just think there are better low risk options where you're likely to see a better return

 

[denislawsbackheel]

Current CPI is 3.4% so a 5% return on premium bonds is beating inflation.

 

[chris85mcfc]

Current CPI is 3.4% so a 5% return on premium bonds is beating inflation.

'Current', by then youre playing catch up

If you're getting a 5% return every year then fair enough, but that's not likely with premium bonds

Current average return on bonds is 4.4%, but some will end up with more and most will end up with less

 

[flook]

Current CPI is 3.4% so a 5% return on premium bonds is beating inflation.

particularly as its tax free, unlike most interest outside an ISA these days

 

[denislawsbackheel]

'Current', by then youre playing catch up

If you're getting a 5% return every year then fair enough, but that's not likely with premium bonds

Current average return on bonds is 4.4%, but some will end up with more and most will end up with less

You are quite right of course but
On a total of £9600 worth of premium bonds my winnings this year have been
J £100
F £150
M £50
A £50
M £150
Total £500

Great fun.

 

[Cassandra]

Don’t think I’ll cash in my 55 year old £1 premium bond just yet.

 

[rowarta]

Duncan dares......

 

[Dave Ewing's Back 'eader]

More often 'n not a very pleasing start to the month.

 

[chris85mcfc]

You are quite right of course but
On a total of £9600 worth of premium bonds my winnings this year have been
J £100
F £150
M £50
A £50
M £150
Total £500

Great fun.

Good on ya, you can't turn your nose up at that!