Premium bonds - weird coincidence

[potsy]

I cashed enough of mine in to give me £1000 per year interest in a easy-ish access account.
If I decide to move the rest it will be to a fixed rate ISA to keep that tax free too.

 

[JB052]

Money saving expert will give an idea of the best rates (easy access or fixed term)
Eg https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/#easyaccess

I'm not a Martin Lewis fan so tend to avoid his site, it stems from the days when he was encouraging people to obtain as much credit and debt as possible.

 

[vickster]

I'm not a Martin Lewis fan so tend to avoid his site, it stems from the days when he was encouraging people to obtain as much credit and debt as possible.

Use a different site then? Google best savings rates?

I recently got an instant access saver from Santander, 2.72%, maybe they have similar?

Raisin have some good deals too for example

 

[Legs]

Mrs Legs trousered £400 this month (full £50k investment) - 2x £50 and 3x £100. Still waiting for the really big one!

 

[Brandane]

Big fat zero in prizes for 3 months out of the last 4. With max holding...
Not at all impressed with Premium bonds over the course of about 10 years. If March is another zero month, or even a skittery £25, then I will definitely be looking to cash in and invest elsewhere.

 

[Mo1959]

Big fat zero in prizes for 3 months out of the last 4. With max holding...
Not at all impressed with Premium bonds over the course of about 10 years. If March is another zero month, or even a skittery £25, then I will definitely be looking to cash in and invest elsewhere.

Starting to think the same. Even a 3 year fixed bond with the likes of Tesco bank gives just over 4% so a guaranteed monthly income of nearly £170

 

[vickster]

Starting to think the same. Even a 3 year fixed bond with the likes of Tesco bank gives just over 4% so a guaranteed monthly income of nearly £170

Indeed, although for me, the advantage of premium bonds are that you can cash them in at any time and winnings are tax free.
There are easy access savers paying 3% but interest is taxed.
Can stick 20k into a tax free isa for a year at around 4%

 

[Chislenko]

Indeed, although for me, the advantage of premium bonds are that you can cash them in at any time and winnings are tax free.
There are easy access savers paying 3% but interest is taxed.
Can stick 20k into a tax free isa for a year at around 4%

The extremely important element of Premium Bonds!

 

[vickster]

The extremely important element of Premium Bonds!

If you win anything of course. Also depends on what other savings you have and your tax position generally

 

[Chislenko]

If you win anything of course. Also depends on what other savings you have and your tax position generally

Paying too much already😊

 

[vickster]

Paying too much already😊

Count yourself lucky to have enough money to be in that position
Spend some of it on an iPhone and an Apple Watch

 

[Fastpedaller]

30 years ago we had 8k in PB's (as a house deposit fund). On 3rd of the month (I don't recall which of course) I received one of their winners envelopes. I though it could be really big (being that early in the month) and was shaking as I opened the envelope. It was £1,000 - wow that was good, and we'd only put the money in about 8 months prior. Of course it's just how the luck rolls, and that's the thing. A guaranteed 4% in the bank or take the chance with PB's?....... You'll never 'win' IM interest with the bank!
They used to publish the £s holding of the winning bond, along with how long the bond had been held - ISTR £1m was won by someone who'd only bought £100 and only something like 3 months prior. (I wonder if they still publish similar stats?)

 

[vickster]

30 years ago we had 8k in PB's (as a house deposit fund). On 3rd of the month (I don't recall which of course) I received one of their winners envelopes. I though it could be really big (being that early in the month) and was shaking as I opened the envelope. It was £1,000 - wow that was good, and we'd only put the money in about 8 months prior. Of course it's just how the luck rolls, and that's the thing. A guaranteed 4% in the bank or take the chance with PB's?....... You'll never 'win' IM interest with the bank!
They used to publish the £s holding of the winning bond, along with how long the bond had been held - ISTR £1m was won by someone who'd only bought £100 and only something like 3 months prior. (I wonder if they still publish similar stats?)

They do
https://www.nsandi.com/prize-checker/winners

 

[SpokeyDokey]

I cashed enough of mine in to give me £1000 per year interest in a easy-ish access account.
If I decide to move the rest it will be to a fixed rate ISA to keep that tax free too.

Way to go imo.

NS&I make money simply by keeping their expected rate of return (not guaranteed on an individual investor basis) well below prevailing market rates.

Currently 3.15% vs 4.45% (Close Brothers 5 year FRB).

As pointed out by @Mo1959 upthread there are some good rates on shorter terms too.

We are just about to open a new FRB with the aforementioned Close Brothers. Not 50k but fairly chunky.

At 50k our guaranteed interest would be £11125.

Obviously across 5 years you will need to do better than that with PB'S to be in front. Not impossible but unlikely.

But, more likely, you could hit the average predicted return of 3.15% every year giving a cash return of £7875. A loss of £3250 vs the FRB.

Or you could win nothing and be £11125 out of pocket.

Not a good proposition for me although I accept that some people may be happy to play the gamble.

 

[Jenkins]

Currently 3.15% vs 4.45% (Close Brothers 5 year FRB).
<snip>
At 50k our guaranteed interest would be £11125.

Wouldn't it be more like £12160 (£50k + 4.45% = £52,225 in year 1, then 4.45% on the £52,225 for year 2 and so on)?
Makes it sound even better.