Discussion
I have around £7k sitting in an ISA and e-Savings account with Barclays, both earning minimal interest (1-2% IIRC). This is obviously peanuts, so I started thinking about Premium Bonds - risk free, but no guaranteed return (and possibly not such a great idea with inflation rising and reducing the value of my investment).
From reading their web site am I correct in that the prize fund is dependent on current (BoE) interest rate? I want to understand how to calculate the average annual return, or at least what the historical returns have been, so that I am compare with ISA/savings returns. Plus I like the idea of the (very slim) chance of winning a big prize.
From reading their web site am I correct in that the prize fund is dependent on current (BoE) interest rate? I want to understand how to calculate the average annual return, or at least what the historical returns have been, so that I am compare with ISA/savings returns. Plus I like the idea of the (very slim) chance of winning a big prize.
PBs is pure luck, its a monthly lottery where you can get your capital back, thats it
Ive got a few hundred quid from years ago, held £30K for a while, got about 1% return over 2 years...did something else with the money since
Just buy a grands worth, if fate has it to award you a lottery win, then so be it
Ive got a few hundred quid from years ago, held £30K for a while, got about 1% return over 2 years...did something else with the money since
Just buy a grands worth, if fate has it to award you a lottery win, then so be it
Well I guess in theory you should earn 1.5% 
http://www.nsandi.com/products/pb/rates
Interest rates
We hold a prize draw every month with a £1 million jackpot. We set the size of each month’s prize fund by calculating one month’s interest on the total value of all eligible Bonds, at the annual rate shown below.
Annual prize fund interest rate Tax information
1.50% All prizes are tax-free
http://www.nsandi.com/products/pb/rates
Interest rates
We hold a prize draw every month with a £1 million jackpot. We set the size of each month’s prize fund by calculating one month’s interest on the total value of all eligible Bonds, at the annual rate shown below.
Annual prize fund interest rate Tax information
1.50% All prizes are tax-free
ringram said:
Well I guess in theory you should earn 1.5%
http://www.nsandi.com/products/pb/rates
Interest rates
We hold a prize draw every month with a £1 million jackpot. We set the size of each month’s prize fund by calculating one month’s interest on the total value of all eligible Bonds, at the annual rate shown below.
Annual prize fund interest rate Tax information
1.50% All prizes are tax-free
Thanks. Don't know I didn't spot that on their site. So only marginally lower interest than an ISA then. Looking like a decent investment idea.http://www.nsandi.com/products/pb/rates
Interest rates
We hold a prize draw every month with a £1 million jackpot. We set the size of each month’s prize fund by calculating one month’s interest on the total value of all eligible Bonds, at the annual rate shown below.
Annual prize fund interest rate Tax information
1.50% All prizes are tax-free
Re: "Lottery jackpot" - the top prize of £1M is small by lottery standards and the odds are very very small. There are 41Bn bonds in issue vs ~14M:1 chance of the lottery jackpot = ~2900 times better chance of winning the £1M with £1 in the lottery than in PB, though, if you have the minimum buy of £100 that reduces to 29x less chance of winning on PB. The upside is that your stake is safe and returned whenever you want, the downside that on average you will get 1.5% tax free, though obviously one person getting £1M reduces the effective rate for others - this lifted (copyright acknowledged) from the NS&I website: Value of prizes, number of prizes, total pot and total number of prizes.
Higher value6% of prize fund
£1 million 1
£100,000 5
£50,000 8
£25,000 18
£10,000 46
£5,000 91
Medium value
5% of prize fund
£1,000 1,089
£500 3,267
Lower value
89% of prize fund
£100 31,986
£50 31,986
£25 1,746,099
Total value for
February 2011 £54.4 million 1,814,596
Higher value6% of prize fund
£1 million 1
£100,000 5
£50,000 8
£25,000 18
£10,000 46
£5,000 91
Medium value
5% of prize fund
£1,000 1,089
£500 3,267
Lower value
89% of prize fund
£100 31,986
£50 31,986
£25 1,746,099
Total value for
February 2011 £54.4 million 1,814,596
Mr E Driver said:
Ha, I posted the same response (though with the August figures in 2010)....swerni said:
Held £30k for many years.
Sold them all as the returns were pathetic.
I use to enjoy getting the post but after a year of very little I cashed in the lot.
Personally I wouldn't bother
If I don't get a win in Feb, I'm out too. Had some wins but mostly £25's lately...it's no longer exciting when that's the most likely win...it was a bit different when it was £100, pre-inflation 12 years ago.Sold them all as the returns were pathetic.
I use to enjoy getting the post but after a year of very little I cashed in the lot.
Personally I wouldn't bother
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