£25 a month for 20 years = £6k
But if you got 5% on that, you’d have over £9k.
(I changed it to 20 years because that’s the max the calculator that I found does)
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I’ve had bonds for my daughter for around 4 years now (initial lump sum and then £25 a month the last couple of years) and so far she’s won an additional £175 on top of her deposits. Probably on par what she would have in a traditional account, maybe slightly more.
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Premium bonds don’t have an interest rate. They have a global prize rate which applies to all money invested across all accounts. So some individuals will win less than the global prize rate and some will win more.
If you meant NS&I’s other savings accounts, no they’re not set at the bank rate. They can adjust independently of that. But in generall I think they try not to beat the rates offered by the retail banks, as if NS&I consistently had the highest rate no one would use the retail banks (due to higher deposit protections from NS&I).
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If depositing by standing order into premium bonds each month, what would be the best date to set the SO for please? Thinking towards the end of the month so they aren’t not in a draw for too long? Thanks
my parents have been buying Bonds for my children each birthday - my son’s been the luckiest so far with three £100 wins in the space of 9 months. I’ve had ones since I was his age that have won nowt!
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I have my SO on the 28th, as others have said so the money sits in a savings account the rest of the month. They always process quickly for me and even work on weekends.
The reason they make you wait a month before they’re eligible is so that people don’t pay in on the 30th, have the draw run on the 1st, and withdraw them again. By delaying the entry by a month it prevents people doing that as they’d always miss a month.
But yeah, paying in towards the end of the month makes the most sense.
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My son had his from birth to 16. When he had access and found he’d won nothing in those 16 years he cashed them in. Now gone on crap, no doubt 
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This has often been true in the past, but it’s not the case at the moment.
According to moneysavingexpert, if you have £50k saved in premium bonds then you only have a 2.2% chance of earning less than inflation (CPI).
Source: https://www.moneysavingexpert.com/savings/premium-bonds-calculator/
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The odds on a single premium bond winning is 21,000 to 1.
This doesn’t make very much sense. From a decision-making point of view you really have to factor in the probability of winning, not just the amount you might win. Otherwise you can’t distinguish between alternatives properly - you surely aren’t really indifferent when presented with a choice between, say, a guaranteed £100 or a 1/10 chance of £150, or 1/100 chance of £150.
In the case of premium bonds the sensible attraction is not the possibility of large wins (these are exceedingly rare, outweighed by the large probability of winning £0, and in any case accounted for in the expected value of 4.4%), but the tax free nature of the winnings.
If you have the opportunity of a guaranteed post-tac return of greater than the prize rate, I don’t really see why you’d prefer them, but if you would be paying tax on interest (and particularly higher rate tax) then they look pretty good.
You’re paying by foregoing the fixed interest - this has real value, so it isn’t free.
They normally have a “net financing target” i.e. the amount of money the government has said they should raise, and will adjust rates to try and meet that - for a while a couple of years ago premium bonds were market-leading because they needed to raise more. Then they overshot and dropped rates to try and prompt withdrawals.
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But the point is that, once you have chosen not to spend £25 on a takeaway, you have the choice of what to do with it - you could put that money in an easy access savings account and earn 5% on it over a year - that’s real money that you could have. By choosing premium bonds you are foregoing that £1.25. That’s not to say that it’s necessarily a bad choice, but opportunity cost is a real thing and it’s important to be aware of it.
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Which is certainly a choice one could make, but to view it as cost-free is simply not correct.
Well, it’s clear you haven’t really understood what I wrote, but that’s okay. I’ve said my piece and you’ve made your choice.
I think Premium Bonds are a good product, just not for every situation.
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But not smart enough to know the difference between loose and lose.
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Then don’t start with the “I’m smart” rhetoric when someone was trying to help you.
So you’re trying to say the original point you wanted to make was “I’m happy losing money because I’m quick witted”
You wanted to join in disagreeing with someone trying to help and tried to act clever. And failed.
Unsure why people are so combative on here lately. So many threads seem to turn into endless sniping.
Some like Premium Bonds, some don’t. It doesn’t require such fierce debate.
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Have a look here www.moneysavingexpert.com/savings/kids
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