# Prize Bonds are looking attractive alternatives to deposits



## Raging Bull

Prize Bonds being tax free are starting to look attractive again but you'd have to be buying 4k worth to have a decent chance of a prize


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## Brendan Burgess

Raging Bull said:


> Prize Bonds being tax free are starting to look attractive again but you'd have to be buying 4k worth to have a decent chance of a prize



The interest rate currently being used to determine the prizes is 1.75% tax free.    www.prizebonds.ie

This is a comparably attractive rate. 
You can access the money at any time - no penalties 

Compared to the 1.375% (2.5% gross)  you can get on the best instant access deposits, this is indeed attractive. 


Even if you win nothing, you are giving up only 1.375%. 

It was different when rates were 5%.


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## Evander73

Raging Bull said:


> Prize Bonds being tax free are starting to look attractive again but you'd have to be buying 4k worth to have a decent chance of a prize



In my experience, you'd need to be very lucky to win anything substantial on a 4k investment in prize bonds, as there are currently approximately 280 million of them held.  

I suppose if you won even the smallest prize of 50 euro just once a year, you'd be no worse off than if you'd placed it on deposit (with an outside outside chance of winning something bigger). If...


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## Lightning

Raging Bull said:


> Prize Bonds being tax free are starting to look attractive again but you'd have to be buying 4k worth to have a decent chance of a prize



You need to factor in odds as a comparable factor to deposit interest. Odds are not specially driven by the 'average' rate of return that the NTMA pay on State Savings Prize Bond prizes because very few people get the 'average'. 

€1,000,000 is given to 1 person 6 times a year. With 6 million (the last figure I can find) of Prize Bonds in circulation, the changes of you winning this in per year are approx. 1 in 1 million. Hence, you have a 0.00001% chance of winning this per year. 

€20,000 is given to 1 person 52 times a year. With 6 million (the last figure I can find) of Prize Bonds in circulation, the changes of you winning this in one year are approx. 1 in 115,384. 

There are small prizes of 50 EUR to 1,000 EUR. You would need to use countless variables to work out the real probability, suffice to say that it is low, very low, of getting any meaningful return. 

The 'average' person gets far less than 1.75%. 

Marc did a great post on this a while ago, the post is very dated, with old rates of return, but the principle remains the same.


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## Brendan Burgess

CiaranT said:


> You would need to use countless variables to work out the real probability, suffice to say that it is low, very low, of getting any meaningful return.



Hi Ciarán 

But there is no meaningful net return on ordinary deposits either. 

If the choice is between 

a) A deposit paying 5% 
and 
b) A Prize Bond with an average return of 5%, but a 99% chance of 0 and a 1% chance of 500%

I would choose a) 

But if it's between 
a) a net reurn of 1.5% 
and 
b) An average of 1.75%  with a 99% chance of 0 

I just might go for b) 

Brendan


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## Marc

Ciaran,

I have worked out some rough numbers based on the latest data on the website.

At the end of April this year according to prizebonds.ie the total amount in prize bonds was 1.7 Billion and the "interest rate" is 1.75%

1.7 billion times 1.75% = 29,750,000 in prizes.

Remove the 1m jackpots (every 6 months) that you probably won't win from the prize fund

= 29,750,000 - 6,000,000 = 23,750,000 realistic prize fund

Divide that back into the bond pool of 1.7 billion and you get 1.397%

So a more meaningful "interest rate" for prize bonds is 1.4%

Now build in a risk factor which is that some months you will "win" less than this "average" in fact for some people they may win nothing at all. Of course someone has to win the jackpot.

So just how likely is this? There are 280 million bonds in issue so every other month each bond you own has a 1 in 280 million chance of winning a million.

The problem with grasping the smallness of "1 in 280 million" is that we never see 280 million objects. I am one of 4 children in my family - easy. But one in 280 million cannot be readily visualized.

Have a guess how many years 280 million seconds is..........answer at the bottom

We therefore tend to overestimate the likelihood that we could win the jackpot and this is compounded by the fact that every other month someone actually does win.

We also know that people prefer impossibly small chances of winning but hate any chance of losing. Hey, your original stake is safe and you can have it back anytime ( less inflation and the opportunity cost of the lost interest you could have made if you had done something sensible)

If you buy more than one bond in the hope of improving your chances of winning the jackpot , you really just expose more of your savings to the risk of earning less than the average 1.4%pa. Until you are able to hold every single bond in existence for an infinite period at which point your prize is exactly the 1.75% interest rate.

The only body capable of pulling off that feat is NTMA who win the prize of borrowing your savings at an interest rate of just 1.75% rather than much higher rate in the bond market.

280 million seconds is 8.872 years. Just say tick tock to yourself, now imagine that for nearly 9 years .
You have to randomly select just one of those seconds over that whole period.

Pick any date in the future: On wednesday 20th December 2017 at 10.45 in the morning and 26 seconds or is it 27 seconds?


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## Lightning

Great post Marc, great probability analysis and analysis of the human psychology that goes with lottery playing against insurmountable odds. 

A 1 in 280 million chance of getting the top prize (and there are not many small prizes anymore) needs to be factored into anyones decision when choosing between deposit products and Prize Bonds. 

Brendan, whilst I see where you are coming from, I think the probability of a zero return via Prize Bonds is far too high to justify choosing Prize Bonds over deposit products or other investment products.


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## Brendan Burgess

Hi Marc

 You are working out the chances for someone with €1 invested for exactly one year. 

I think you should work out what the Expected Return is for someone who has €100,000 invested. 

And most people don't invest for one year.  They leave their deposits there for the long term. So I would imagine that their return would average out at the 1.397% return you have calculated.



> borrowing your savings at an interest rate of just 1.75% rather than much higher rate in the bond market.


For someone who is putting there money away in three year NTMA Bonds at 1.3%, it's roughly the same return, but with access to their money. 

Just to be clear - I think that people should hold a diversified portfolio of shares and not be bothering with deposits of any sort.  But for people who are invested in deposits,  Prize Bonds are now relatively attractive.


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## dub_nerd

Brendan Burgess said:


> I think you should work out what the Expected Return is for someone who has €100,000 invested.


 
Hi Brendan, with the changes in interest rates and hikes in DIRT and PRSI, I'm considering putting a considerable chunk in prize bonds. I did some calculations on likely returns and thought I would share them here. Although, as Marc has said, an exact calculation of the odds of a given return is complex, it is easy to simplify roughly to within any given confidence level. (The likely returns are a little less than what Marc calculated). The main thing for people to bear in mind is that for a small investment, your chances of an average return are negligible, and Prize Bonds are _not_ a good idea in this case. If you want to treat Prize Bonds as an investment and want to have an excellent chance of "average" returns (which I will define below), you would want an absolute minimum of €10k investment, but preferably several times that. I will do a calculation for €100k but I will also talk about the implications for smaller and larger amounts.

*Summary.*

The prize fund is split between a small number of large prizes which you have essentially no chance of winning, and a large number of small prizes which -- if you invest enough -- you can reasonably rely on an average return from.

Your chances of achieving an average return increase with the amount of money you invest. Note that your return may be more or less than the average no matter how much you invest, but the chance of getting near the average are better for higher amounts and longer periods of investment.

For an investment of €10k to 100k you will probably achieve about 1.18% (equivalent to 2.1% from a bank account assuming 41% DIRT + 4% PRSI). For an investment of 100k+ you may achieve 1.33% (equivalent to 2.4% assuming DIRT and PRSI). Note that these are all probabilistic values with reasonable confidence levels. If you want the excruciating detail, read on. 

*How the prizes are structured.*

The total prize fund is currently calculated at 1.75% of the value of total Prize Bonds held. Latest figures are as of April 2013 and can be viewed on the State Savings web page. Since the total value is currently €1.7b (made up of 280m individual Prize Bonds), this gives a total annual prize fund of €29.75m, structured as follows:

€1,000,000 x 6 times annually = €6,000,000
€20,000 x 46 times annually = €920,000
€1,000 x 5 times weekly = €260,000
€100 x 500 weekly = €2,600,000
_Total annual value: _€9,780,000

Now, ironically, the above details can be almost ignored, since you won't be winning any of that. Almost all of your returns will come from the €50 prizes which make up the remainder of the prize fund. The only reason for the above calculation is to subtract the money you won't win (€9.78m) from the total prize fund (€29.75m) to give the total value of €50 prizes: €19.97m. This works out at 399,400 x €50 prizes per year. 

*What are your personal odds?*

It would be messy to calculate odds based on number of prize bonds held. It's easier to calculate your fraction of the total prize bonds by dividing your investment into the total monetary value of all bonds. For a holding of €100,000 you have €100k/€1.7b = 1/17,000 of all bonds. This is very important! _On average_ you will win one prize out of every 17,000 prizes. (If you invested €10,000 this would change to one prize in 170,000; if you invested €1m it would be one prize in 1,700).

*How much will you win?*

Unfortunately, few people have an intuitive feel for odds and risk. Think about those €1,000 prizes, 5 times weekly. There are 260 per year. With your investment of €100k you will win one on average every 17,000 / 260 = 65 years. Do you want to bet on a return that might come in every 65 years (or might not)? Clearly not. There's a good chance you won't collect on it in your lifetime. Still, it's worth thinking about this in terms of confidence levels. These are a little complicated to work out so I won't go into details, but will just state that: you have a 50% chance of winning that €1,000 prize within 45 years. If you want a 90% level of confidence, you will have to wait 150 years. And to have a 99% chance of winning, you will wait 300 years!

Now, I'd be prepared to treat a 99% chance of winning as a fairly sure bet, although I'd still want to think about the consequences of the 1% chance that I _wouldn't_ win, to see if I'm prepared to take that risk. But it's all academic in this case because I'm not prepared to wait 300 years to be 99% sure of a return! The point to illustrate here is that the average time for a return -- 65 years -- is by no means a guarantee that after 65 years you will have won once. You might _never_ win, or it might take a million years! But there's a 99% chance you'll have won (at least once) after 300 years. 

Hopefully it's obvious that there's no point even thinking of winning any of the big Prize Bond prizes, unless you are a gambler rather than an investor. On the other hand, look at the number of €50 prizes annually -- 399,400. With your €100k investment you stand to win 399,400 / 17,000 = 23.5 per year on average, or nearly one per fortnight. Just as importantly, we want to know what the confidence level is that you will achieve this average or close to it. Here we have to use some horrible statistical methods again (the binomial distribution, for anyone who wants to check it out), so I will just state the result: there is about a two thirds chance that you will win the €50 prize between 20 and 28 times annually, and a 92% chance you will win it between 16 and 32 times. The long and short of this is that "your mileage may vary" but there is a good chance you will get close enough to the average. _Remember_: this is based on a 100k investment. The odds of you getting close to the average diminish with a smaller investment. This does not mean you will win a smaller percentage -- you could win _more_! But the odds get "lumpier" the less you invest. (If you don't understand this, this investment may not be for you).

So what is the _average_ return? It is 23.5 x €50 / €100k = 1.175%. But don't forget the confidence levels -- they tell us that there is a 92% chance that your _actual_ return will be between 0.8% and 1.6% for an investment of €100k within a given year. The _average_ return doesn't change no matter what you invest. But the confidence level of getting close to the average is higher for a higher investment. For a €10k investment there is much less chance that things will average out in any given year, due to the lumpiness problem. To illustrate, remember that with €10k invested you will win on average 2.35 x €50 / €10k = 1.175%. Still the same average return, but you can only win an integer number of prizes. Here are two graphs for €10k and €100k showing the percentage probability of each number of €50 wins:










The difference in lumpiness should be obvious. For €10k you will win 2.35 times on average, but there's a hefty 9% chance you'll win nothing at all in a given year, and only a 70% total chance that you'll win 1 to 3 times. Things are much smoother with the €100k -- you could still win nothing but the chances are tiny: much less than one in a billion! The chances are less than one in a hundred that you will win less than 14 times (or more than 35 times).

So, an average return of 1.175% would be the final answer except that between the €1000 (and upward) prizes that you will _never_ win, and the €50 prize that you will win fairly regularly, there is also the €100 prize. Now, there are 15 times fewer of these, so you can only expect to win 1.53 of them every year. When we factor these in the average return goes up to 1.33%.

_But_ -- and this is a big but -- the low average number of €100 wins also gives a much lower confidence level that you will achieve close to the average... that lumpiness factor again. If you only invest €10k, you will probably wait many years before winning a €100 prize, so you should use the lower average return of 1.175% unless your investment is over a timescale of decades. If you invest €1m you are much more likely to quickly average the higher return of 1.33% even over a timescale of a single year. For a €100k investment, you are somewhere in the middle. It might be prudent to bank on 1.175%. But if you leave your money invested for a few years, you are more likely to achieve the higher return of 1.33%.

Remember, this is all statistical. _You are not guaranteed anything_. However, for large amounts of money and time, the chances of an average return are good.

*EDIT - returns may be higher!*

The numbers I used here are based on the Prize Bond FAQ which gives a total value of outstanding Prize Bonds of €1.7b as of April, and an implied number of €50 prizes of 399,400 per year, or 7,680 per week. However, the front page of the Prize Bonds website states that there are now over 8,000 €50 prizes per week. And the results for the latest draw (currently 15-Nov-2013) show 9,346 prizes in that week. Subtracting the 506 prizes greater than €50, that leaves 8,840 €50 prizes. Now, _amtc_ mentions down page that people use Prize Bonds to accumulate money due for tax. This implies that the number of bonds may reset around end of year. But the 2012 Prize Bonds annual report says that the value of the fund went up 14% from 2011 to 2012. An increase in fund value doesn't directly change your likely return because your share of the fund, and thus your chances of winning a fraction of a bigger pot, go down accordingly. However, with increasing value, the number of large prizes (which eat up a third of the potential returns) goes down as a fraction of the overall prize fund, leaving more of the small prizes from which your returns primarily come. Basically, as long as the prize structure stays the same, increases in fund value favour investors over gamblers.

EDIT: add graphs
EDIT2: update with finer grained graphs.
EDIT3: add caveat about increase in outstanding bonds.
EDIT4: update with more accurate graph and numbers based on using Stirling's formula


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## The Ghoul

Good post, dub nerd. I put 100k into PBs six weeks ago thinking along the same lines as yourself. No point investing a small amount and no point even thinking about the jackpot prizes.

My wins so far are
Week 1: 1 x 50
Week 2: nothing
Week 3: nothing
Week 4: 2 x 50
Week 5: 1 x 50
Week 6: 1 x 50

Pleased with that so far and if it continues for a year the return will be just over 2% net, higher than I'd get with a one year fixed term deposit.

I confess to getting quite excited at 12:30 every Friday logging onto prizebonds.ie and knowing that there is a good chance that I'll win 50 quid. 

Also, I put my winning cheques into ten year Solidarity Bonds so I'm compounding my returns. Handy that the minimum amount for SBs is 50 euro.


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## ronaldo

I love the use of seconds to illustrate to people how big a certain number is. I saw it recently in posts talking about how people talk about billions of euros without realising exactly how big a number it is - a billion seconds is 31 years, 259 days, 1 hour, 46 minutes and 40 seconds. :O


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## amtc

I was always amazed by the high rate of redemptions of Prize Bonds until someone (in that office) told me that it was a place that self employed put in cash before paying tax the next year


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## Marc

Great post by Dub nerd, certainly one of the most useful and informed posts on AAM.


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## postman pat

The Ghoul said:


> Good post, dub nerd. I put 100k into PBs six weeks ago thinking along the same lines as yourself. No point investing a small amount and no point even thinking about the jackpot prizes.
> 
> My wins so far are
> Week 1: 1 x 50
> Week 2: nothing
> Week 3: nothing
> Week 4: 2 x 50
> Week 5: 1 x 50
> Week 6: 1 x 50
> 
> Pleased with that so far and if it continues for a year the return will be just over 2% net, higher than I'd get with a one year fixed term deposit.
> 
> I confess to getting quite excited at 12:30 every Friday logging onto prizebonds.ie and knowing that there is a good chance that I'll win 50 quid.
> 
> Also, I put my winning cheques into ten year Solidarity Bonds so I'm compounding my returns. Handy that the minimum amount for SBs is 50 euro.


Great post also.... it gives actual returns and i can identify with the feeling of excitement on a Friday checking your numbers,,, to steal a quote from an advert ...  PRICELESS
anyway i invested last week, a tidy sum also, will let u know how i get on.

 Pat


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## dub_nerd

+1, The_Ghoul ... great to see some real numbers. Your result of five wins in six weeks is well ahead of what I would have expected. The same performance for the year would give you 43 wins compared to an average 23. Unfortunately, I calculate the _a priori_ odds of that to be well under one in ten thousand, so I'm going to predict that your performance levels off somewhat.

On the other hand, my numbers could be wrong. MS Excel can't come close to calculating totally accurate odds for such a vast number of possibilities (...try calculating factorial 399,400!), but I would expect my approximations are very close.

Would be good if you and postman_pat gave us an update a couple of times yearly. I'll do likewise if I take the plunge.


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## postman pat

Would be good if you and postman_pat gave us an update a couple of times yearly. I'll do likewise if I take the plunge.


Will do..anyway got my numbers in post today,checked them...guess what!!..won €50


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## elcato

Not to take this off-topic but how would one 'invest' in one handy lump sum 10k or 100k (in prizebonds) and how handy is it to get it back very quickly ?
And does a bank accept the receipt as 'savings' ?


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## dub_nerd

I haven't done it, but I've done other State Savings and I presume it's the same. Go to the post office with an application form and a cheque, and proof of name, address and PPSN. You have to hold prize bonds for a minimum of three months, but after that you can get them on demand. I'd imagine it would take them a couple of days to cut you a cheque.


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## RainyDay

God be with the days when Amex Blue would give you 1% cashback on the Prize Bonds, along with six or seven weeks free credit if you timed it right!


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## TomOC

Are all winnings posted out by cheque?  



The Ghoul said:


> Good post, dub nerd. I put 100k into PBs six weeks ago thinking along the same lines as yourself. No point investing a small amount and no point even thinking about the jackpot prizes.
> 
> My wins so far are
> Week 1: 1 x 50
> Week 2: nothing
> Week 3: nothing
> Week 4: 2 x 50
> Week 5: 1 x 50
> Week 6: 1 x 50
> 
> Pleased with that so far and if it continues for a year the return will be just over 2% net, higher than I'd get with a one year fixed term deposit.
> 
> I confess to getting quite excited at 12:30 every Friday logging onto prizebonds.ie and knowing that there is a good chance that I'll win 50 quid.
> 
> Also, I put my winning cheques into ten year Solidarity Bonds so I'm compounding my returns. Handy that the minimum amount for SBs is 50 euro.


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## dub_nerd

TomOC said:


> Are all winnings posted out by cheque?


 
There are three options on the application form:


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## The Ghoul

Update, I have both good news and bad news. The bad news is I was mistaken in my previous post, I actually won 5 x 50s in 7 weeks, not 5 x 50s in 6 weeks as I originally stated.

The good news that in today's draw I won 1 x 100 and 1 x 50. Nice result! 

I'll post a screen grab from prizebonds.ie if I can upload it somewhere as this forum doesn't seem to allow attachments.


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## The Ghoul

See image grab below


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## redwood park

Hi. Is it safe to post Bond Certificate.  I just checked on line and I won 50E today. I bought 1000E worth 6yrs ago. This is my first win. I thought they posted out cheques for small amounts. Thank You


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## The Ghoul

redwood park said:


> Hi. Is it safe to post Bond Certificate. I just checked on line and I won 50E today. I bought 1000E worth 6yrs ago. This is my first win. I thought they posted out cheques for small amounts. Thank You


Not sure exactly what you're asking there. They do post cheques for small amounts but cheque takes a few days to arrive in the post. If you haven't changed address since you bought the PBs then you just need to wait for it. 

I don't know what happens if you choose the option for automatic reinvestmemt or payment into a bank account. I imagine that you will receive some form of confirmation in the post.


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## postman pat

redwood park said:


> Hi. Is it safe to post Bond Certificate.  I just checked on line and I won 50E today. I bought 1000E worth 6yrs ago. This is my first win. I thought they posted out cheques for small amounts. Thank You



Yes they do post cheques out in the post,i dont know why they say you you have to sent in your bond on the Prize Bond website,maybe they mean for amounts over €1000 but they do not make this clear.

Pat


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## redwood park

Hi "The Ghoul".   Congrats on your winnings.  It does say under your list of prizes shown above that you have to claim your prize by writing to Fexco enclosing your Bond Certificate.  It said the same when I checked and I had won 50E.  Why does it say that if it not necessary?.   I just thought they had changed the rules.  I will wait and see if cheque comes in post during the week.


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## The Ghoul

Good point, redwood park, not sure why it says that. I think that webpage is also used for unclaimed prizes and if you have an unclaimed prize going back months/years, sending the bond to them is possibly the norm.

In your case I expect you will get a cheque, if you don't receive it by Wednesday or Thursday this week I would contact them.


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## censuspro

For arguements sake, if there were no "prizes" in the prize bonds, isn't the net return almost the same as with traditional deposits based on current interest rates?


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## redwood park

Just for the record. I got my 50E cheque this morning.  Still cannot understand why they tell you to send in the Bond Cert when you check winning numbers on line. Thank you for taking the time to reply. Good luck to you all.


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## dub_nerd

censuspro said:


> For arguements sake, if there were no "prizes" in the prize bonds, isn't the net return almost the same as with traditional deposits based on current interest rates?


 
Yes it is more or less equivalent. Other advantages include: you get paid as you win prizes, almost the equivalent of an "interest first" account. It's tax free and -- as far as anyone knows currently -- PRSI free... no need to file a tax return. Your money is 100% guaranteed by the Irish state, not a limited guarantee by a bank. 

_However_, returns are not guaranteed. The degree of confidence that you will make an average return is strongly linked to the size of the investment. You can't get your money back in the first three months.


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## Slim

censuspro said:


> For arguements sake, if there were no "prizes" in the prize bonds, isn't the net return almost the same as with traditional deposits based on current interest rates?


 
What have I missed here? If there were no prizes, how is there any return, quite apart from the loss from inflation? S


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## The Ghoul

Update I haven't won anything for 2 weeks (29th Nov and 6th Dec) but today (13th Dec) won one 100 euro prize


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## amadain

*Congrats to the Cork Winner*

Congrats to the Cork Winner of this months *1,000,000 Euro* !

Draw Date : 30-DEC-2013​





1000000 PrizesIC274344 - CORK


http://www.prizebonds.ie/livedraw/drawresults.asp?0


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## pudds

Its getting harder to win.



> The National Treasury Management Agency (NTMA) has reduced the  interest rate that applies to the state savings schemes -- and this  includes Prize Bonds.
> From January, the number of weekly €100  prizes will be halved from 500 to 250, according to the Prize Bonds  Company, which runs the scheme.
> This is the third cut to prizes in a year.



http://www.independent.ie/irish-new...prize-bonds-slashed-as-rate-cut-29860577.html


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## The Ghoul

I haven't won anything since the 13th December 

14 draws, 500 euro won on 100,000 = 1857 per year = 1.86%.

Obviously this does not include the insignificant amount of compound interest from the prizes I have reinvested elsewhere.


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## STEINER

I came across some prizebonds just the other day from the 1950's which belonged to a relative.  I checked them all online <6months and >6 months.  Not a single win in nearly 60 years!!  £IR 200 was a lot of money back then compared to the euro equivalent now, so this wasn't a good investment.


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## postman pat

The Ghoul said:


> I haven't won anything since the 13th December
> 
> 14 draws, 500 euro won on 100,000 = 1857 per year = 1.86%.
> 
> Obviously this does not include the insignificant amount of compound interest from the prizes I have reinvested elsewhere.



i havent won since 29th november,won €50 each draw for first 3 draws, then nothing, just seems a little odd,stll a bit exciting though checking them at 12 30pm every friday!

  Pat


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## IsleOfMan

postman pat said:


> stll a bit exciting though checking them at 12 30pm every friday!
> 
> Pat



I have about €4k in Prize Bonds. I never "check" them. Should I be doing this? I thought that winners were notified?


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## postman pat

IsleOfMan said:


> I have about €4k in Prize Bonds. I never "check" them. Should I be doing this? I thought that winners were notified?



No if your address is the same address as on the prizebonds, you will be contacted.I think people run in to problems if they move house etc.


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## The Ghoul

Another winless draw for my 100k last Friday. AFAIK the chance of winning a 100 euro prize was reduced after the 1st January but the chance of winning 50 remained the same. I haven't won anything since the 13th December. Should have bought BOI shares!

I have often heard conspiracy theories about people winning prizes shortly after purchasng PBs then winning nothing after that. Although I don't really see how there can be truth to that rumour, my pattern of wins followed by no wins is making me wonder.

04th Oct - 50
11th Oct - 0
18th Oct - 50
25th Oct - 0
01st Nov - 0
08th Nov - 100 (2 x 50)
15th Nov - 50
22nd Nov - 150 (1 x 50, 1 x 100)
29th Nov - 0
06th Dec - 0
13th Dec - 100 (1 x 100)
20th Dec - 0
27th Dec - 0
03rd Jan - 0
10th Jan - 0
17th Jan - 0
24th Jan - 0


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## postman pat

Hi
   I have a similar pattern Ghoul,won for first few weeks up to end of
December (€50) each time, won nothing since,id just like to know how the numbers are drawn,I have also heard the conspiracy theories that bonds bought recently seem to win more often,this was given more weight when the woman at the Post Office where i lodge my winnings asked me did i buy the bonds lately,when i confirmed that i had,she said that it was the case that recent bonds do win more often,Every week she said she received a list and could see the dates bought.

PS...maybe this warrants some deeper investigation.


 Pat


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## dub_nerd

I've a sibling who anecdotally reports similar for an investment of several tens of thousands (enough that prizes should broadly average out) -- number of prizes dropped after initial purchase several years ago. Been meaning to look at exact probabilities with him.

In the meantime, Ghoul, I took a quick look at your chances of going six weeks without a prize. From my write-up on page 1 of this thread, your 100k investment should win 23.5 x €50 prizes per year. Assume the chances are spread evenly throughout the year (which may not be exactly true, but it will suit a rough calculation).

How do we calculate the odds of zero wins for a period? Think of a coin toss with a fifty-fifty (i.e. 1/2) chance of winning. If we consider your chances of winning at least once in a sequence of several tosses, it gets messy because you could win on the first toss, or the second, or both, or basically any combination of the tosses. But if we instead consider the odds of _not_ winning, that's a lot easier. To _not_ win, you have to _not_ win on the first toss _and_ not on the second _and_ not on the third etc. Combining odds this way (event one _and_ event two _and_ ...) is simply multiplicative, and since the odds of losing each toss are the same as the odds of winning, it's:







The prize bonds situation is very similar, but we'll do it in decimals instead of fractions. As mentioned, you'll win 23.5 prizes on average each year. That's 23.5/52 = 0.452 per week. That's your chance of winning each week and, since you must either win or not win, your chance of _not_ winning each week is (1 - 0.452) = 0.548. So your chances of not winning for _n_ weeks is simply 0.548 multiplied by itself _n_ times, or 
	

	
	
		
		

		
		
	


	




.

So for the six week run you've just had, it's 
	

	
	
		
		

		
		
	


	




 approx. That means your odds were a bit better than one in forty of not winning. Not enough to support a conspiracy theory ... _yet_ ... it's the sort of thing you'd expect to see once a year perhaps. Also bear in mind your average number of €50 prizes still currently works out at 18 in a year, which is on the low side but well within the probability distribution (see the graph on page 1). But I'd be keeping an eye on it -- another two or three weeks without a win (odds of one or two hundred to one) and there would start being a serious whiff of rat. CRC and Rehab would be in the ha'penny place compared to a Prize Bonds scandal. 

EDIT: I see that the prize fund went down by about 10% for 2014, so you are now only expecting about 21 prizes per year, which puts you even more in the ball park -- your odds of six weeks in the doldrums are now only slightly worse than one in twenty.

EDIT2: The number of bonds held has been growing by double digit percentages for some years, which would go some way toward explaining why newer bonds win preferentially. Also there is a reasonably high turnover in bonds, with anecdotal evidence that many are bought throughout the year and encashed at year end, so the odds of winning early in the year may be slightly diminished compared to the back half of the year.


----------



## The Ghoul

Another great post, dub_nerd. Thanks. Just on the reduction of the prize fund, I was under the impression that this only affected the 100 euro prizes and would therefore not affect the chance of winning 50?

*


			
				prizebonds.ie said:
			
		


			€20,000 awarded each week, other than when the €1 Million prize is awarded.
5 €1,000 prizes.
500 €100 prizes (reducing to 250 from January 2014)
Over 8,000 €50 prizes.
		
Click to expand...

*


----------



## dub_nerd

Thanks for the correction, The_Ghoul, I didn't notice that. It looks to me like the reduction in the number of €100 prizes will account for about half the prize fund reduction from 1.75% to 1.6%. The other half will presumably be from €50 prizes, which will reduce your expected number of wins on a €100k investment from 23.5 to 22 per annum.


----------



## Silvera

postman pat said:


> Hi
> I have a similar pattern Ghoul,won for first few weeks up to end of
> December (€50) each time, won nothing since,id just like to know how the numbers are drawn,I have also heard the conspiracy theories that bonds bought recently seem to win more often,this was given more weight when the woman at the Post Office where i lodge my winnings asked me did i buy the bonds lately,when i confirmed that i had,she said that it was the case that recent bonds do win more often,Every week she said she received a list and could see the dates bought.
> 
> PS...maybe this warrants some deeper investigation.
> 
> 
> Pat



The same thing has happened to me!
I win prizes soon after purchasing bonds?!


----------



## Jacko1

You tick a box on the form to receive a cheque or re-invest.


----------



## Billo

Silvera said:


> The same thing has happened to me!
> I win prizes soon after purchasing bonds?!



And me. Bought in March. Won a few prizes in April and May.
Nothing since.


Must cash them in on a regular basis and buy again.


----------



## dub_nerd

It's impossible to say how likely or unlikely a run of bad (or good) luck is without knowing how much the investment is. But if it's less than several tens of thousands you can expect "lumpy" returns.


----------



## The Ghoul

Nothing today, 7th week in a row.

04th Oct - 50
11th Oct - 0
18th Oct - 50
25th Oct - 0
01st Nov - 0
08th Nov - 100 (2 x 50)
15th Nov - 50
22nd Nov - 150 (1 x 50, 1 x 100)
29th Nov - 0
06th Dec - 0
13th Dec - 100 (1 x 100)
20th Dec - 0
27th Dec - 0
03rd Jan - 0
10th Jan - 0
17th Jan - 0
24th Jan - 0
31st Jan - 0


----------



## postman pat

stop press....... won 2 x €50 today.


Pat


----------



## dub_nerd

The Ghoul said:


> Nothing today, 7th week in a row.


 
Based on my new guesstimate that you should now be winning 22 x €50 prizes per year for a €100k investment, your odds of not winning seven weeks in a row are:






The odds against 8, 9 , and 10 weeks without wins are, respectively, 80-1, 140-1, and 243-1. (Those are the _a priori_ odds, of course. Being already on a 7 week losing streak, your odds of going 8 or 9 are much improved ).


----------



## The Ghoul

8th week in a row 

04th Oct - 50
11th Oct - 0
18th Oct - 50
25th Oct - 0
01st Nov - 0
08th Nov - 100 (2 x 50)
15th Nov - 50
22nd Nov - 150 (1 x 50, 1 x 100)
29th Nov - 0
06th Dec - 0
13th Dec - 100 (1 x 100)
20th Dec - 0
27th Dec - 0
03rd Jan - 0
10th Jan - 0
17th Jan - 0
24th Jan - 0
31st Jan - 0 
07th Feb - 0


----------



## Gerry Canning

Love the general positivity of this thread. 

Methinks if the Plus Odds on Prize Bonds stay more than Banks give on deposit, our Banks will engineer a change , in the same way that they whinged about Post Office accounts.


----------



## TomOC

For me it has been zero wins for three months with 19000 invested.  An instant acesss account like TSB Bonus Booster would be paying about 70 Euro after tax in that period.


----------



## dub_nerd

For 19k you expect to win 4 prizes a year, so 3 months without a win is not greatly surprising. The problem is that with a smaller investment you are likely to go much longer before achieving an "average" return. The_Ghoul's chances of going 8 weeks without a prize are the same as yours of getting no prizes for a year.


----------



## dub_nerd

The Ghoul said:


> 8th week in a row


 
You haven't changed address or something? 
You're  starting to look decidedly hard done by.


----------



## The Ghoul

dub_nerd said:


> You're starting to look decidedly hard done by.


Maybe I'm one of Jill Kerby's "prize idiots" 

My bad run is interesting from a statistical point of view and thank you again for your posts and calcs in this thread. Going at least 8 draws without a win was unlikely but so too was winning two 100 euro prizes in the first 11 weeks.

It does show that even with a relatively large amount invested that returns can be "lumpy".


----------



## dub_nerd

Yeah actually, joking aside, you're not looking at all disastrous from an averages point of view. With a bit over a third of your first year gone you have the equivalent of 10 x 50 prizes. You got more than your share of 100's ... with the reductions from January you only stand to win 0.75 x 100's on average in a year. Thanks for keeping us updated. Will be interesting to see how it progresses if you don't mind posting every so often.


----------



## The Ghoul

At long last


----------



## postman pat

congrats Ghoul...zilch for me today sadly....theres always next friday!


----------



## The Ghoul

postman pat said:


> theres always next friday!



Friday has arrived


----------



## postman pat

zero today the 21st february as you can see by my face.........


----------



## monagt

Prize Bonds and Lotto == "A Tax on the Foolish"


----------



## Marc

I don't think that's fair. People who buy prize bonds aren't idiots.

As Dub nerds excellent posts show, it's more a tax on optimism over numeracy.


----------



## monagt

> I don't think that's fair. People who buy prize bonds aren't idiots.



I did not say idiots. 

Its a little like a divorced person remarrying 





> The triumph of hope over experience


  - Samuel Johnson


----------



## STEINER

any winners today?


----------



## The Ghoul

No wins for me anyway


----------



## Gerry Canning

Well boys, to sicken you, got 50 , on my Prize Bonds of 200.
Now going to Bookies as I am on a roll! ie Easy come = Easy go.


----------



## postman pat

not a bean here either..now since 31 January..anyway the million was won in Cork,why couldnt it be me??


----------



## Billo

Blank again


----------



## The Ghoul

50


----------



## postman pat

...no good today either,


----------



## The Ghoul

Oh yes


----------



## postman pat

congrats Ghoul...zero here today...


----------



## TomOC

TomOC said:


> For me it has been zero wins for three months with 19000 invested.  An instant acesss account like TSB Bonus Booster would be paying about 70 Euro after tax in that period.



Going much better now.  3; 50 Euro wins the past 5 weeks, 2 of them today.  The money has been in about 4.5 months now.


----------



## postman pat

€50 today...... im happy    ish


----------



## Janet

This is really interesting. Even if the amounts you've invested to get those wins is way, way beyond me. 

I did get a gift of some prize bonds once from work. Years ago and I don't think I ever actually got the bonds into my hands, though. However, inspired by this thread (and my recent, er, success in dealing with an equally long ago never-updated-addess situation with Vodafone) I'm going to send them off an application for a statement and see if I'm in their records at all. Can't hurt. Is it possible to claim prizes if you don't have the actual bonds? I couldn't see anything about that in the FAQ on their website.


----------



## The Ghoul

postman pat said:


> €50 today...... im happy ish


 Hopefully that's the start of a better sequence for you! 

 Nothing for me today.


----------



## postman pat

ah ok Ghoul..i hope so...its interesting to keep tabs on who gets what every week,its the million next week too,be lucky!!


----------



## niceoneted

Postman pat you'll have to hold on another month for the million draw. It's every two months.


----------



## dub_nerd

Just dropped in to see how things are going. The Ghoul -- I'd say you're looking good again in spite of the hiatus from mid December to mid Feb. You've got about three quarters of your expected winnings for the year in just under half a year.


----------



## postman pat

niceoneted said:


> Postman pat you'll have to hold on another month for the million draw. It's every two months.



Wow Ted you are right!!.


----------



## huskerdu

Janet said:


> This is really interesting. Even if the amounts you've invested to get those wins is way, way beyond me.
> 
> I did get a gift of some prize bonds once from work. Years ago and I don't think I ever actually got the bonds into my hands, though. However, inspired by this thread (and my recent, er, success in dealing with an equally long ago never-updated-addess situation with Vodafone) I'm going to send them off an application for a statement and see if I'm in their records at all. Can't hurt. Is it possible to claim prizes if you don't have the actual bonds? I couldn't see anything about that in the FAQ on their website.


Yes, if the bonds are registered to you at your address, you can claim the prizes.

 I have lost prize bonds and got a replacement cert from them.

 I have never actually won anything, so I don't know what the claim procedure is in those circumstances.


----------



## The Ghoul

50


----------



## Palerider

I have 16000 bonds, I have an issue with the new DIRT tax and prsi on savings, I came off fixed term deposits and for the moment I am not in any fixed term deposits which I used to be, I am leaving it in prize bonds, I thought the Ghouls link interesting, here is my actual summary to today's date...

€200k in PB's return since September 20th €1100, broadly six months seems to indicate maybe 1% ish annually, pretty poor. 



These are the previous Winning Numbers that match your selected Prize Bonds.

 Draw Date Prize Value 
21-MAR-2014 EUR50 
21-MAR-2014 EUR50 
07-MAR-2014 EUR50 
07-MAR-2014 EUR50
07-MAR-2014 EUR50
31-JAN-2014 EUR50 
31-JAN-2014 EUR100
24-JAN-2014 EUR50 
24-JAN-2014 EUR50 
10-JAN-2014 EUR50
03-JAN-2014 EUR50 
20-DEC-2013 EUR50
13-DEC-2013 EUR50
13-DEC-2013 EUR50
13-DEC-2013 EUR50 
06-DEC-2013 EUR50
06-DEC-2013 EUR50
29-NOV-2013 EUR50
22-NOV-2013 EUR50 
18-OCT-2013 EUR50
20-SEP-2013 EUR50


----------



## postman pat

oo


----------



## dub_nerd

Palerider said:


> €200k in PB's return since September 20th €1100, broadly six months seems to indicate maybe 1% ish annually, pretty poor.


 
It's about 1.1% -- almost exactly in line with what I would expect (for the reasons outlined in this post on the first page of the thread). Of course, you could get more or less, but there's about a sixty per cent chance that your annual return will be in the range 0.8% to 1.4%, with the most likely being a fraction over 1.1%. (There is a very small additional component due to €100 prizes, but this has reduced since I wrote that original post). So I'd say you're getting about what you should expect.


----------



## usual

Following this with interest and hoping that The Ghoul and Postman Pat won so much on Friday that they are still celebrating...
Glad to say I won 50x2....


----------



## theresa1

I also follow this with much interest. I'm thinking of maybe a few thousand and once I do it -that's it -in for life. Should I bother? -should i just keep at the 10 year bonds with the post office - interest guaranteed.


----------



## The Ghoul

Nothing for me on Friday, would have posted if I had won anything! Well done to usual, two wins in one draw is sweet.

Re: PBs vs 10 year SBs, I regard my PBs as a 7 day notice account that pays "interest" on average every few weeks which can then be invested (into SBs in my case) 

I have a fair amount in the 3, 5.5 and 10 year state savings products and plan to leave that money invested for the full term. I think its a good idea to have savings split between short, medium and long term products.


----------



## usual

That makes sense,To have a spread,but I dont have sense so when I sold a property last year deposit interest was so low that I put every cent into prize bonds...
I know I need to diversify but love the Fri lunchtime buzz,,,and I really think you need large amount of bonds to get any return.Am just about recieving the expected 1.2% this year,,,,Last year was better.1.8% so the drop in prize fund is accurately reflected..
Good luck to all.....Another Fri coming soon,,,,


----------



## dub_nerd

theresa1 said:


> I also follow this with much interest. I'm thinking of maybe a few thousand and once I do it -that's it -in for life. Should I bother? -should i just keep at the 10 year bonds with the post office - interest guaranteed.


 
theresa1, and anyone else thinking of investing "a few thousand" in prize bonds, _do_ make sure you understand the likely variability in your returns. This is dramatically different for someone investing a thousand euro, versus someone investing a million. The _average percentage_ return is the same for both -- you will get about 1.1% in both cases. BUT ... and this is an enormous BUT ... the chance of things averaging out in a given timeframe, say, a year, are very different. In fact for very small investments they are, of course, impossible.

To illustrate that point, let's say you just buy a single prize bond for €6.25. Your 1.1% return will be just under 7c/year, right? But you can't _win_ 7c -- the smallest prize is €50. So actually, on average what you will get is a €50 win every (wait for it...) 700 years or so! Ok then, that clearly isn't going to yield any return at all in a viable timeframe, so let's up our investment to €4,550. At 1.1%, that gets us a nice even €50/year ... a single prize, right?

Not so fast! As well as being able to calculate that your average return is 1.1% (with a crucial emphasis on *average*) we can also calculate the likelihood that you will _diverge_ from the average by a given amount. Here was the graph for a €10k investment from my post on page 1 -- this shows the number of €50 wins along the bottom, and each bar shows the percentage likelihood of getting that number of wins:






Although the _average_ number of wins per year here is just over 2 (to give you your 1.1% yield) the chances that you'll only get one win -- halving your return -- are very significant, at over 20%. And the chances that you'll get no wins at all are 10%. (Of course, you could equally win _more_ than two, so to some extent this boils down to whether you are looking at this as an investment or a gamble).

Things get even worse if you reduce the investment to, say, €1k. Actually, the €10k graph above is a good reflection of the odds for €1k after ten years. In other words, with €1k invested there is a 10% chance that you will have won nothing at all over 10 years. Conversely, consider the graph for someone who invests €100k for one year:






Now, this person stands to win just over 22 x €50 euro prizes each year, to make up their 1.1% return. To only get half that yield they'd have to win 11 prizes or less. I didn't even bother showing those numbers on the graph because they are very low. But if I did it, and added up all the bars for 11 prizes or less, they would sum to about 1%.

To reiterate: at €100k you have a 1% chance of getting less than half the average return in a given year. At €10k, you have a more than 30% chance of getting less than half your anticipated average of 1.1%. (Another way of putting this is that if ten people reading this invest €10k expecting two prizes, three of them will be back here next year complaining they won zero or one). This is the crucial point. The _average_ is still 1.1% for everyone ... but, what I like to call the "lumpiness" of the different possible returns, is much greater for the smaller investor.

In the long run, it all evens out of course. But the less you invest, the longer it may take to even out. So the small investor needs to consider whether they are prepared to wait years or even decades to achieve their average 1.1% annualised return.

(This also explains why I used the figure of 1.1% in the first place, and not the 1.6% that the Prize Bonds company tells you is in the prize fund. Some of the fund is made of large prizes which even the very large investor is unlikely to ever win in a viable timeframe. The average is indeed 1.6%, but even the €100k investor would probably wait millennia for that to average out because of the lumpiness in the odds for the big prizes. I did point out that at €100k+ your likely returns start to edge toward 1.3% because you can include some €100 prizes within a viable time horizon, but that figure is now reduced somewhat again since changes in the prize structure this year).


----------



## monagt

dub_nerd, very informative posts, thanks.

Time to change the name of this thread ??


----------



## callybags

The way I would look at investing around €1,000 in Prize Bonds is this:

You are foregoing around €15 in interest after DIRT etc.

This is roughly 30c per week. So for 30c you are entered into a weekly draw with the chance of winning a big prize.

Better value than the lottery IMO.


----------



## niceoneted

I'm with callybags on this.  I have 18k in PB's.(6k only put in in last few weeks). I have won 3x€50 since start of year.. Last year won 2x€50. I see it as my lotto draw every week. I see groups at work putting in vast amounts of money over the years for the lotto with no significant win and thy never get the money back. With the PB's you can always cash in.


----------



## monagt

> The cost of an alternative that must be forgone in order to pursue a certain action


What about the opportunity cost? 
A return of 1.1% is very poor versus the return on Savings Best Buys Deposit accounts or investing in a company that has dividends, for example,(Vodafone 4.8% and you would also had the windfall as new investors, BP 4.9% + share capital growth, etc)
And the inflation loss as well.


----------



## dub_nerd

monagt said:


> What about the opportunity cost?
> A return of 1.1% is very poor versus the return on Savings Best Buys Deposit accounts or investing in a company that has dividends, for example,(Vodafone 4.8% and you would also had the windfall as new investors, BP 4.9% + share capital growth, etc)
> And the inflation loss as well.


 
Prize Bond wins are tax free. So 1.1% grosses up to 1.86% or 2% depending on whether you are liable for 4% PRSI in addition to the 41% DIRT on deposits. That doesn't compare too badly to the best lump sum deposit rates. If you're trying to spread money across institutions, it may be a better rate than some of your banks. It can't be directly compared to risk assets such as shares.


----------



## monagt

> t can't be directly compared to risk assets such as shares.



Say BP @ 4.9% or Vodafone @ 4.8% - nett return better that Prize Bonds (1.1% not guaranteed )
Capital Gain on shares compensates for risk..........I would hope 

My portfolio lost 50% in 2008 and now up 150 % since then + Dividends


----------



## postman pat

€50 today.. anyone else had any luck?


----------



## tidyweb

dub_nerd - why 1.1% is the return not 1.6%.

Even is you negate the €1m and €20K and €1K prizes - it only drops to 1.3%.

Great posts by the way.


----------



## niceoneted

None. Hoping the next win will be 20k or the million!!!!


----------



## dub_nerd

tidyweb said:


> dub_nerd - why 1.1% is the return not 1.6%.
> 
> Even is you negate the €1m and €20K and €1K prizes - it only drops to 1.3%.
> 
> Great posts by the way.


 
You're right -- it all boils down to which prizes you include. I've updated my figures based on the latest Prize Bond FAQ, which shows €1.9b total investment, 1.6% total prize fund, and the number of €100 prizes reduced from 1000/week to 500/week as of Jan 2014.

The prizes greater than €50 represent 0.5% of the total investment, leaving a hair under 1.1% of the 1.6% prize fund available for €50 prizes. I think we can agree that if we are looking at this as an investment we can discount prizes of €1k or over -- even with €100k invested you will only win a €1k prize every 73 years on average. So the question is do we include the €100 prizes, which represent an additional 0.1% of return? (The return is then 1.22%, down from about 1.3% after they reduced the number of €100 prizes in January).

This has to depend on how much you invest. For a €10k investment you will only win a €100 prize every 7 years on average, while for €100k it will be every 9 months. In the former case, I'd be nervous about assuming that you will achieve a longer run average of 1.22% because "longer" could be _very_ long. In the latter case it's much more likely but could still be lumpy. If you invested €1m I'd have no hesitation saying the return is likely to be close to 1.22%, since you'd be expecting more than 7 x €100 prizes per year, along with your 217 x €50 prizes.

In summary, the average return for everyone is 1.6%, but you are practically certain not to achieve that because of the lumpiness in the high value prizes. You can reasonably discount everything down to the €100 prizes, leaving a return of 1.22%, but for investments of €100k or less you would be safer assuming a 1.08% return. Obviously you could be lucky or unlucky in any case, but as a conservative investor these are the numbers you could reasonably expect.

(By way of an actual example, we have The Ghoul's very excellent record keeping on the previous pages. He has 2 x €100 prizes in a 6 month period for a €100k investment, which was ahead of the odds even before they halved the number of €100 prizes in January. If his second half year matches his first he'll actually achieve a 1.6% return -- better than the best term deposit account after tax -- but the reduction in €100 prizes makes this a lot less likely. His eight week run without any prize at all is also a good example of how things don't have to even out in the short run. Also, for everyone who beats the odds there will be someone who is beaten _by_ them).


----------



## usual

2x50 again yesterday..Could be a dry spell looming.


----------



## tidyweb

Is it possible to upload pictures or excel sheets here?

I work out that with current returns you would need to invest €150,385 to return 100% chance of €100 prize (you would also get 36 x €50).

Where I struggle is this - if you toss a coin twice you have a 100% chance of throwing a head. But you probably wont - does that make sense? So can I count on the €100 prize or is this where "confidence" comes in. Can you send me you email address somehow Ill show you some workings.


----------



## Silvera

I've been following this thread with great interest...pardon the pun!

Over the years I have gradually increased my Prize Bond holdings to the point where I now have a total value in the region of €30k invested. (I'm currently considering moving savings from a bank account and increasing (substantially) my total invested in Prize Bonds).

However I too have noticed that each time I purchase a new batch of bonds I win a few prizes for the initial months after purchase - then nothing?! 

This seems to be a trend among you guys too? 
What is going on with the PB fund? 
(It's almost as if their policy is - 'Give him/her a few wins then he/she will  leave the money with us in the hope of winning further prizes'!?)


----------



## tidyweb

That is just your imagination I would guess. But they seem shy to release any information. But €30K in nowhere near enough bonds to be able to see a trend.
It would be great of they would release all winning numbers in history.

If you invest €30K be prepared to see about 7 cheques per year for €50 euro hit the mat. 

You should expect to win the €1m jackpot about once in every 11,000 years. But that said if you win it next week you wont mind waiting another 22,000 year for the next win.


----------



## tidyweb

My calcs say 1.26% return with just €50 and €100 prizes.
Not that it really matters but I would like to see where we diverge in our calculations. Do we have different assumptions


----------



## dub_nerd

tidyweb said:


> Is it possible to upload pictures or excel sheets here?
> 
> I work out that with current returns you would need to invest €150,385 to return 100% chance of €100 prize (you would also get 36 x €50).
> 
> Where I struggle is this - if you toss a coin twice you have a 100% chance of throwing a head. But you probably wont - does that make sense? So can I count on the €100 prize or is this where "confidence" comes in. Can you send me you email address somehow Ill show you some workings.


 
Yes, there is an average number of wins that you can calculate, and this has the highest chance of coming up (although the odds are certainly not 100%). The confidence level falls off either side of this. You can sum the odds for each individual number of wins to get the odds of your returns falling in any given interval.

Re: 100% odds -- you're adding the 50% odds of a head on each of two tosses to get 100%. Odds don't sum like that -- no matter how many times you toss the coin there is always a slim chance that you will _never_ throw a head, so the odds can never be 100%. Perhaps counterintuitively, what you need to consider is the odds of _not_ throwing a tail. Think about it like this: suppose I toss a coin ten times and want to know the odds of getting at least one head; I could get a head on the first toss with 50% probability, or on the second, or on both first and second -- when you think of all the different ways that you could toss at least one head over ten tosses, it gets complicated. _But_, there's only one way of getting _zero_ heads -- by getting tails on the first toss, _and_ tails on the second, _and_ tails on the third, and so on. When you want to combine the odds of a particular outcome in _each_ of a series of independent trials, you simply multiply them. So for a coin toss you have a 1/2 chance of getting tails on the first toss, 1/4 of on first _and_ second, 1/8 on first _and_ second _and_ third, and so on. The odds are 1/(2^_n_) after _n_ tosses. And, of course, since if you don't throw all tails you must throw at least one head, the odds of that are 1 - (1/(2^_n_)). So, for example, the odds of at least one head after two tosses is 3/4 or 75%.

For the odds of winning any given number of coin tosses, say _m_ wins out of _n_ tosses we have to resort to slightly more complicated calculations using the binomial coefficient. For prize bond wins the approach is the same, it's just there is a very much greater number of trials -- hundreds of thousands per year -- and your odds in each independent trial depend on what percentage of the total issued prize bonds you hold. Another complication is that the binomial coefficient calculation involves factorials, and for the prize bond calculation they are of very high degree -- higher than a spreadsheet is typically able to handle (e.g. Excel blows up above 10^309 ~ 170!). I found I had to use Stirling's approximation, which allows you to work in logs.

But if we're only interested in averages, that's much simpler -- just calculate the percentage return delivered by each category of prize, that is, the prize amount multiplied by the number of prizes divided by the €1.9b total fund. I get:

€1m -- 0.3158%
€20k -- 0.0484%
€1k -- 0.0137%
€100 -- 0.1368%
€50 -- 1.0853%

So just start at the bottom and add percentages for whichever prizes you want to include to get the average return -- the bottom two sum to 1.22%.

I'm open to correction. You can mail me your workings at s3923-fb2@yahoo.ie. If required I can stick up a shared Google spreadsheet that we both can edit. Independent validation would be welcome.


----------



## dub_nerd

One of the posters mailed me their calculations. I noticed that I haven't factored in the reduction in €100 prizes from Jan 2014, which actually improves the odds for the small investor because these are added to the more winnable €50 prizes. The poster also pointed out that using the number of prizes announced for the Mar 14th draw implies a total fund of €2bn, instead of the €1.9bn in the prize bond FAQ. This is more good news for investors because an increase in fund size increases the more winnable €50 prizes. I now get:

€1m -- 0.3000%
€20k -- 0.0460%
€1k -- 0.0130%
€100 -- 0.0650%
€50 -- 1.1760%
€50 + €100 -- 1.2410%

For investments up to a few tens of thousands, use the 1.176% return figure. For 100k+ use the 1.241% figure. The latter is comparable -- after grossing up -- to the best term deposits, with the advantage of instant access (after the first three months).


----------



## Janet

Janet said:


> This is really interesting. Even if the amounts you've invested to get those wins is way, way beyond me.
> 
> I did get a gift of some prize bonds once from work. Years ago and I don't think I ever actually got the bonds into my hands, though. However, inspired by this thread (and my recent, er, success in dealing with an equally long ago never-updated-addess situation with Vodafone) I'm going to send them off an application for a statement and see if I'm in their records at all. Can't hurt. Is it possible to claim prizes if you don't have the actual bonds? I couldn't see anything about that in the FAQ on their website.



Got my letter from The Prize Bond Company Limited today - I do own 4 prize bonds (since either 2000 or 2001) but yeah, like most people with small amounts for years, still haven't won anything. Oh well. It was nice to have a couple of weeks of daydreaming and I'll still be able to have the thrill of checking them every once in a while, now that I know the numbers. 

I have to say I'm impressed with the service. I filled out the form and emailed it to them and two or three days later got a reply that my query had been forwarded to the Prize Bond company. The following day I got another email that my query had been passed to their customer service section. Short, but friendly and courteous responses. The letter with details, including exactly how to update my address with them and sort out about getting replacement bonds, arrived today having been posted on 9th April.

So, four down, fifteen thousand nine hundred and something to go before I can anticipate the kind of returns dub_nerd is talking about.


----------



## dub_nerd

Not to worry Janet -- with four prize bonds you can already expect to win a €50 prize on average once every every ... ehem ... 170 years!!!


----------



## The Ghoul

There was a draw today, presumably 1 day early due to Good Friday. Nothing for me anyway, that's 3 weeks in a row now.


----------



## dub_nerd

Another tip off from a poster:

http://www.independent.ie/business/...-despite-cut-to-weekly-winnings-30194119.html

The article mentions lots of money flowing into prize bonds "despite three cuts to weekly winnings". What it misses is that two out of the three "cuts" were actually good news for the investor. The bad type of cut is when they reduce the percentage of the fund paid out in prizes. But the _good_ type is when they reduce the higher prizes in favour of more lower prizes without cutting the overall return. It would be great if they got rid of the headline €1m prizes. The high number of small prizes is what makes Prize Bonds viable as an investment and not just a gamble. Clearly lots of people out there have worked this out for themselves (or are avid readers of AAM).

If sales of Prize Bonds continue on their current trajectory, and in the absence of further cuts to the prize fund percentage, by the end of the year you could be seeing returns of 1.23% to 1.29% (depending on investment level). I've just noticed that my Rabobank returns have fallen to 1.5% and are about to be slashed to 1% _before tax_ as of May 1st. I'll be down to the Post Office Tuesday morning to look at putting a very significant sum into Prize Bonds.


----------



## usual

Zero yesterday, as expected....No easter egg for me...


----------



## postman pat

zero here also...


----------



## postman pat

dub_nerd said:


> Another tip off from a poster:
> 
> http://www.independent.ie/business/...-despite-cut-to-weekly-winnings-30194119.html
> 
> The article mentions lots of money flowing into prize bonds "despite three cuts to weekly winnings". What it misses is that two out of the three "cuts" were actually good news for the investor. The bad type of cut is when they reduce the percentage of the fund paid out in prizes. But the _good_ type is when they reduce the higher prizes in favour of more lower prizes without cutting the overall return. It would be great if they got rid of the headline €1m prizes. The high number of small prizes is what makes Prize Bonds viable as an investment and not just a gamble. Clearly lots of people out there have worked this out for themselves (or are avid readers of AAM).
> 
> If sales of Prize Bonds continue on their current trajectory, and in the absence of further cuts to the prize fund percentage, by the end of the year you could be seeing returns of 1.23% to 1.29% (depending on investment level). I've just noticed that my Rabobank returns have fallen to 1.5% and are about to be slashed to 1% _before tax_ as of May 1st. I'll be down to the Post Office Tuesday morning to look at putting a very significant sum into Prize Bonds.



Good post Dub,i was going to withdraw from prizebonds at the end of this month,but looking at shares etc its nice to know your money is safe and wont drop 10% overnight im going to stick with them for another while....


----------



## amtc

I have 15k in Prize Bonds - 25 goes in every month for the last number of years and I put in a lump sum in January of 10k. First one was bought by my parents in 1973. I have won once around the time I was in college.

Am I just unlucky?


----------



## dub_nerd

amtc said:


> I have 15k in Prize Bonds - 25 goes in every month for the last number of years and I put in a lump sum in January of 10k. First one was bought by my parents in 1973. I have won once around the time I was in college.
> 
> Am I just unlucky?


With your current holding you stand to win about three times per year. Before your lump sum investment it was about once per year. Before that it would depend on how quickly you built them up, but a multi-year run without a win may not have been too unlikely. I would say that your current holding is just above the absolute minimum at which prize bonds make sense as an investment, where your chances of winning less than the hoped-for 1.1% return in a given year fall to about one in three, and the chances of winning nothing at all fall below 10%.


----------



## theresa1

dub nerd - what is the absolute minimum in your opinion? I was thinking of giving the purchase of 10 year solidarity bonds a break and buying some prize bonds.

I'm finding it hard to convince myself to get some prize bonds. I don't see the point in say €1,000 in bonds if I can't win and I'm certainly not willing to go to €100,000.


----------



## dub_nerd

theresa1, if I was to hazard a number I would say €10,000. For that investment you stand to win "several" (i.e. between 2 and 3) €50 prizes per year. It might still take several years to average out to your 1.2% return.

For a €1,000 investment you are looking at an average of only one €50 prize every 3 to 5 years. That's way too little. It could take decades before things "average out". 

In reality, for a decent chance of averaging out quickly, I'd say several multiples of €10,000 is advisable.


----------



## dub_nerd

Here's another attempt to show the "lumpiness" issue for different size investments. It's not easy to read exact values from this chart -- it's supposed to be illustrative:







On one horizontal axis you have the size of investment €10k, €20k, €30k ... €100k. On another you have the number of €50 wins in a year. On the vertical axis you have the percentage chance of getting that number of €50 wins for the given investment. For each size of investment, represented by a different colour, the highest bar is the most likely number of wins, and is close to the expected long run average number of wins. Of course, bigger investments result in bigger numbers of wins although the _percentage_ return eventually averages out the same for everyone.

It may seem paradoxical (or even _wrong_!) that the highest percentage chance of hitting the average is for the smallest investment. But look closer. For that small investment, you also have a significant chance of only getting _half_ the average (22%), or nothing at all (10%)!

By contrast, look at the higher investments. In the following view I've swung the whole chart around so you can see the highest (€100k investment):






It's not easy to read the numbers, but the highest bar for the €100k investment represents 23 wins with a likelihood of about 8%. But you also have close to the same 8% chance each of getting 21 or 22 or 24 or 25 wins. That adds up to nearly a 40% chance of getting within 10% of your expected average return every year. By summing more bars we see an 80% chance that your return will be between 75% and 125% of the average and a better than 99% chance that it will be between 50% and 150% of the average. What are the odds of getting less than half the expected average? They are less than 0.3% ... vastly less likely than only getting half your expected average for a €10k investment.

Again, I stress that things will eventually average out. But it is likely to take _much_ longer to do so for small investments, possibly many years.


----------



## theresa1

Thanks dub nerd - appreciate your work.


----------



## postman pat

zero this week also...


----------



## The Ghoul

I'm having another bad run - nothing today or since the 28th March


----------



## dub_nerd

A priori odds, based on €100k investment and current prize fund size, of going _n_ weeks without a win:

 1 week  -- 64%
 2 weeks -- 40%
 3 weeks -- 26%
 4 weeks -- 16%
 5 weeks -- 10%
 6 weeks --  7%
 7 weeks --  4%
 8 weeks --  3%
 9 weeks --  2%
10 weeks -- 1%
11 weeks -- 0.7%
12 weeks -- 0.4%
13 weeks -- 0.3%
14 weeks -- 0.2%
15 weeks -- 0.1%


----------



## usual

1x50 today....


----------



## Palerider

3 by €50 today
1 by €50 each week for the past four weeks...

can't last ...;-(


----------



## postman pat

not a bean.............


----------



## Ryan

Do you have to put a substantial amount into prize bonds to make it pay off?


----------



## dub_nerd

Yes. See the top of page 7 of this thread. Upwards of €10k, preferably several times €10k, are needed to give you a good chance of averaging a 1.2% to 1.3% tax free return.


----------



## postman pat

zilch


----------



## MugsGame

I'm sharing postman_pat's luck. Put in just under €100,000 last month and no winnings four draws later. Still well within the bounds of probability though.


----------



## dub_nerd

MugsGame said:


> I'm sharing postman_pat's luck. Put in just under €100,000 last month and no winnings four draws later. Still well within the bounds of probability though.


Quite unlucky though -- odds are more than 5 to 1 against that scenario. Just as a matter of interest -- how do you know which is the first draw your PBs are included in? Do they tell you in correspondence or is it from the date stamped on the bonds?


----------



## usual

2x50 again today,,,,Going well at the moment...


----------



## MugsGame

> Quite unlucky though -- odds are more than 5 to 1 against that scenario.



Yep 



> how do you know which is the first draw your PBs are included in? Do they tell you in correspondence or is it from the date stamped on the bonds?



The issue date is stamped on the bonds, so I'm assuming it's included in all draws after that date.


----------



## postman pat

Good article in The Sunday Indo  yesterday about prize bonds, To win the big prizes they say is harder than getting hit by lightning,so same view as most people in here... but the article said the sales are rising and rising, so its hard to figure.


----------



## Palerider

2 by €50 last Friday.....on a roll....


----------



## usual

Re;the article in indo. I could never understand the logic in the Million euro prize every second month,,,,Why not give one person 100,000 every draw,,, 52 winners every year instead of 6...and give you more incentive to be in there,,,
I for one would be very glad of 100,000....


----------



## dub_nerd

usual said:


> Re;the article in indo. I could never understand the logic in the Million euro prize every second month,,,,Why not give one person 100,000 every draw,,, 52 winners every year instead of 6...and give you more incentive to be in there,,,
> I for one would be very glad of 100,000....


 
The million quid appeals more to human nature. Most people are innumerate anyway when it comes to odds. If you have any sense, the chances of winning a more frequent 100k prize are still much too small to justify investing in anyway, and if you just have $ signs in your eyes the 100k will be less effective than the million in luring you in.

I'd be much more interested if they paid no prize bigger than €50, and make it a straight 1.6% tax free return.


----------



## MugsGame

MugsGame said:


> I'm sharing postman_pat's luck. Put in just under €100,000 last month and no winnings four draws later. Still well within the bounds of probability though.



First prizes won five draws in. 2 x €50 in today's draw.


----------



## The Ghoul

Nothing for me yet again today, am getting sick of seeing "Sorry, you have no new Winners" and am starting to think about conspiracy theories again!

4th April: 0
11th April: 0
18th April: 0
25th April: 0
2nd May: 0 
9th May: 0 
16th May: 0


----------



## postman pat

€50 today ..ends a bad streak


----------



## Marc

The Sunday Times let me cover this story on the 18th May.

[broken link removed]

With thanks to Dub Nerd for their assistance with the dead hard sums...


----------



## dub_nerd

Well done Marc, nice piece.

One minor quibble -- you say Prize Bonds might work out better than cash deposits if you are in the top tax bracket. But DIRT isn't dependent on your tax bracket, so I wasn't sure what you were getting at there. I suppose there's a dependence on how much you earn from deposit interest, since if you are over the "chargeable" limit you additionally pay 4% PRSI, but this is dependent on the amount of your unearned income rather than your tax bracket.

A second even more minor quibble is about the statement that "the graph is more lumpy toward the left hand side indicating that you are more likely to do badly than to do well". That's not wrong, but it could be caveatted by saying "you are more likely to do badly than to do well _in any given year_". In the long run, of course, you're likely to do "averagely". First we have to agree that by "doing well" we mean getting your average return or better. Let's revisit the €5k graph:







Clearly, the most likely number of €50 wins (called the _mode_ of the distribution) is 1, since that number has the highest percentage chance at 36.28% (based on latest figures). The average (or _mean_) number of wins over a long period is actually 1.176 -- higher than the mode. (We get the average by just dividing the total number of €50 prizes by our fraction of the total Prize Bonds held). Now, you're right that in any given year you're more likely to do "badly" (i.e. get less than the mean) because if we sum the first two columns to give the chance of getting either zero or one wins -- both of which are less than the mean -- we get 67.13%, i.e. a 2/3 chance of doing worse than average. On the other hand, if we subtract that number from 100% we get 32.87%, which is the chance of getting any number greater than one. Now, clearly, each year we win _more_ than one prize, it makes up for a year when we win zero. And we're more likely to win more than one (32.87%) than we are to win zero (30.85%). Not only that, but some of those "more than one" years will be more than two! So it's easy to see why the mean is higher than the mode.

Intuitively, the reason for this phenomenon of the mean (i.e. average) being higher than the mode is because of the skew caused by not being able to win less than zero times, but having a possibility of winning many times more than the mean. (In theory, with a single prize bond, you could win all 470,400 x €50 prizes in a year, but that would take much longer than the lifetime of the universe on average ).

Now for the science bit. Technically, the type of distribution in our €5k graph above is called a binomial distribution. You can imagine a smoother version of it where we're allowed to win fractions of prizes. A smoothly continuous version of the binomial distribution is called a _Poisson_ distribution. That's as distinct from a _normal_ or _Gaussian_ distribution -- the well-known bell curve -- of a truly randomly distributed variable. A Gaussian is a symmetrical curve where the mode and the mean are always the same, i.e. your most likely number of wins is identical to your average number of wins. It is to be noted that as the average number of wins increases, the Poisson distribution more and more closely approximates a Gaussian distribution, which is another way of saying what we already concluded: the more you invest the more likely you are to hit the average in any given year. For smaller investments you'll still win the average but over a longer (perhaps very much longer) number of years.

I'll end with some graphs showing how the Poisson distribution (in blue) differs from the Gaussian (in purple). Here they both are with a mean (vertical grey line) of 1.17, exactly the average number of €50 wins we expect for our €5k Prize Bond investment. The mode (which, remember, is the most likely outcome) is the position along the horizontal axis of the highest point on each curve. The mean, on the other hand, is the position on the horizontal axis where the area under the curve to the left of the mean is equal to the area under the curve to its right. For the Gaussian, which is symmetrical, the mean and the mode are always the same -- but we can only achieve this by allowing for the impossible case of negative numbers of wins as can be seen where the purple curve goes negative. But for the Poisson distribution the mode is _less_ than the mean:






Here is another case, where the Poisson and the Gaussian once again have the same mean, this time equal to 23.52 -- the average number of €50 wins for our €100k investment. See how much more closely the Poisson distribution approximates the Gaussian and the mode is much closer to the mean:






Finally, here are some graphs plucked from [broken link removed] showing a binomial distribution (quite similar to our Prize Bond one) overlaid with a Gaussian with the same mean, for different values of the mean. We see how the binomial distribution, like the Poisson (its continuous version) more nearly approximates the Gaussian as the mean goes up:

[broken link removed]
You can also see that more of the binomial distribution hangs out the left hand side of the area enclosed by the Gaussian because its mode is less than the mean, as we expect. (As Marc puts it, it is "more lumpy to the left", which actually technically is called a _right skew_, because the tail to the right is less steep).


----------



## Bronte

Very interesting thread, like seeing the the Ghoul's returns. Presumably Marc was referring to Dub Nerd in his article. Great analysis Dub Nerd. Not sure if it was factored in, but what about inflation eroding the 100K investment of the Ghoul?

Further up the thread it was mentioned that there is a rumour that newer bonds win more prizes, but that doesn't logically make sense does it.  If it did, than one ought to sell and buy once a year.


----------



## Janet

Marc said:


> The Sunday Times let me cover this story on the 18th May.
> 
> [broken link removed]
> 
> With thanks to Dub Nerd for their assistance with the dead hard sums...



Hi Marc
I spotted a small error in the article. The graph title says that it's for a 50k investment but your article states that the graph shows the return for a 5k investment. Not a big thing but just in case someone invests 5k and then turns up at your door complaining they haven't done as well as your graph ... 
Anyway, I can't even pretend to follow the sums on this really. It's fascinating to me that people can but statistics was the only subject in college that I was worse at than accounting. So glad it was only for one semester! But pedantry? I'm good at that. LOL.


----------



## horusd

I forgot I have PB's! Not a lot, couple of €100...never won a cent!


----------



## Boyd

horusd said:


> I forgot I have PB's! Not a lot, couple of €100...never won a cent!



This is exactly the point of Marc's article. People with smaller amounts (who are in the majority) have much less of a chance of winning than they think.....


----------



## The Ghoul

I'm probably getting another batch of PBs today, 33,000 worth. Have a tax return to pay in October - I'll park the money in PBs, leave it in for at least 3 months and withdraw it in time to pay the tax having hopefully won a few 50 euro prizes.

I presume I will get batch of bonds in sequence so it will be easy to track how much the new bonds win and how much my existing bonds win.

If the new bonds do better then I might start thinking about conspiracy theories again!


----------



## dub_nerd

horusd said:


> I forgot I have PB's! Not a lot, couple of €100...never won a cent!


People always sound surprised when they say that. 
Don't be. With a couple of hundred (i.e. €200) you will win a €50 prize on average every 21.26 years at current rates. But, just as The Ghoul on this thread has gone seven and eight weeks without a win when he is due to win every couple of weeks _on average_, you could easily go one or two _centuries_ without a win and could take many centuries to achieve an average return. I can't say this often enough -- for small amounts of money you should view Prize Bonds as a place to park your money and be able to cash it in when you want. To a first approximation you are not going to win, _EVER!_

_EDIT: _username123 got there before me.


----------



## dub_nerd

Bronte said:


> Very interesting thread, like seeing the the Ghoul's returns. Presumably Marc was referring to Dub Nerd in his article. Great analysis Dub Nerd. Not sure if it was factored in, but what about inflation eroding the 100K investment of the Ghoul?


 
As with any investment, your returns may be more or less than inflation. With the likely returns for a substantial PB investment being 1.2% - 1.3% at present, you don't need very high inflation to wipe them out. (However, they're still better than instant access bank deposits).


----------



## dub_nerd

Bronte said:


> Further up the thread it was mentioned that there is a rumour that newer bonds win more prizes, but that doesn't logically make sense does it. If it did, than one ought to sell and buy once a year.


 
Yes, there is such a perception, but it's not true unless the PB company are committing fraud or have programmed the computer wrong. All the calculations here assume that each draw is independent and you have the same odds in each one. If I was to hazard a complete guess as to why the erroneous perception arises, it would be as follows...

If you write down your sequence of wins and losses as has been done by some contributors here, you'd have something like:



Week 1: | 0 x €50
Week 2: | 1 x €50
Week 3: | 1 x €50
Week 4: | 0 x €50... and so on.

The average is going to depend on how many PBs you hold. However, as with any random process, you will get excursions from the mean. The longer you go on, the more extreme will be the excursions, even though you will always return to the average in the long run. This is a very difficult concept to grasp. Let's take The Ghoul as our guinea pig. 

He's had runs of seven or eight weeks without a win, whereas with his investment he would expect to win just a fraction less than once every two weeks. But over the course of a year, such a void period is not really very surprising. If you waited long enough, you'd eventually have a whole year of no winnings (although my quick calculation suggests that could take a trillion years to happen!). Anyway, void periods of random lengths are to be expected.

But equally, periods of excess wins are to be expected. The Ghoul's had some of those too. But did he write exuberant posts expressing surprise at his good fortune and noting that he was well ahead of expectations? _Oh god, no_! Our innate optimism means that we _expect_ to be rewarded! But eaten bread is soon forgotten. So we notice the voids and complain about them bitterly, whereas we treat the wins as our just deserts.

As I said, over time the length of the longest voids and greatest excesses _both_ increase. But because of a greater propensity to notice the voids, we think our luck is diminishing.

Could be total poppycock ... I'd be interested if anyone has a different theory.


----------



## Squonk

I've been following this thread carefully and put in €55k in April. No winnings up until last weekend where I won two prizes : €50 and €1000. Happy Days! That's my 1.9% return already this year.


----------



## dub_nerd

Squonk said:


> I've been following this thread carefully and put in €55k in April. No winnings up until last weekend where I won two prizes : €50 and €1000. Happy Days! That's my 1.9% return already this year.


 
Now _that's_ jammy. The €1000 prize should be a once in 140 year event for you on average. The good news is that it in no way affects your independent chance of winning an average number of €50 prizes (13 or so) for an overall 3% tax free return (equivalent to 5.1% gross assuming 41% DIRT).


----------



## Palerider

Well done Squonk, I got nothing last Friday and have €200k in PB's....jammy alright ...;-)


----------



## Squonk

'tis better to be born lucky than to be born rich


----------



## Marc

Thanks for the comments everyone.

To be fair to Niall, the editing actually improved the article but when you are required to be concise to start with some of the nuances can be lost.

Dub Nerd:

The reference to top rates of tax was an attempt to capture a high earner with considerable passive investment income who would be subject to a punitively high tax rate on their investment income due to PRSI.

Similarly, the "lumpy graph" was obviously meant to reference any one year rather than forever, but I think this is implied in the overall context.

Finally I noticed the graph was mislabeled but again hopefully the meaning wasn't lost in the overall context.


----------



## usual

1x50 again last week,,,,And its almost Friday again.....


----------



## The Ghoul

50 today


----------



## usual

1x50 again today...


----------



## MugsGame

Not a bean today, hopefully not the beginning of another multi-week losing streak.


----------



## postman pat

zero today also


----------



## SparkRite

Apologies if I missed this info before, but what would be the simplest way to purchase say €85,000 worth of prize bonds?


----------



## Ravima

fill out application form, send it with cheque to NTMA, along with the anti money laundering documentation


----------



## theresa1

SparkRite said:


> Apologies if I missed this info before, but what would be the simplest way to purchase say €85,000 worth of prize bonds?




- Do it in your local post office - they can verify your documents and photo copy them if necessary and give you a receipt.


----------



## SparkRite

Thanks for that folks.


----------



## The Ghoul

As of this week I have added 33k worth of PBs to my existing 100k holding.

Wins for the 30th May:

50 from the 33k batch, 50 from the 100k batch


----------



## usual

1x100 today. Very happy with that,,,


----------



## Squonk

dub_nerd said:


> Now _that's_ jammy. The €1000 prize should be a once in 140 year event for you on average. The good news is that it in no way affects your independent chance of winning an average number of €50 prizes (13 or so) for an overall 3% tax free return (equivalent to 5.1% gross assuming 41% DIRT).


.....and another €50 for me today....this is great fun


----------



## postman pat

im gonna add to the fun...€50 today for moi!...... Ghoul it will be interesting to see how the new bonds compare with the old ones,its getting to be like a mini series.


----------



## The Ghoul

This latest win was from my 100k batch

I've decided to edit my previous post where I gave away part of the bond numbers that I own. Had I continued to only win 50s and 100s this would not be an issue but now that I've had a rare win, stalking would have become much easier. Might sound silly but there you go.

Based on dub nerd's posts, I should only win this amount once in several decades even with 100k invested. So chances are I'll be dead and buried before I win that again!


----------



## usual

Delighted to see you had such a nice win,,,,,,Well done to you and Enjoy...
Nil for me today,,,Next week to look forward to,,,


----------



## MugsGame

Third week without a win. I guess I'm the unlucky fool paying for the free loading skiving likes of The Ghoul


----------



## dub_nerd

The Ghoul said:


> Based on dub nerd's posts, I should only win this amount once in several decades even with 100k invested. So chances are I'll be dead and buried before I win that again!


 

Congrats!


----------



## postman pat

brilliant win Ghoul,,thats the thing about bonds i suppose...the surprise factor..anyway nothing today for me,but next week i know..i just know....


----------



## The Ghoul

Thanks for the positive comments  The win gave me a lot of joy yesterday and I was walking around with a silly grin on my face for much of the day. Interesting psychology at work here given that the win was only 1% of my main holding.

I am not a gambler, I have never placed a bet on anything and have played the lotto about 5 times in my life and felt like an idiot afterwards. With my relatively large holding of PBs I think of the 50 euro prizes as my return and anything on top of that is a bonus.


----------



## dub_nerd

Good points, Ghoul, and exactly the right outlook to take.


----------



## monagt

FYI article from MoneySmart: Are Prize Bonds For Prize Idiots?


> Prize bonds are fine for gifts and for a little bit of excitement with small sums, but they are not for the serious investor.



http://t.co/E3eIOA1RGe


----------



## dub_nerd

monagt said:


> FYI article from MoneySmart: Are Prize Bonds For Prize Idiots?
> 
> 
> http://t.co/E3eIOA1RGe


 
That article is nonsense and, judging by the title and various rhetorical flourishes such as prize bonds having "no place in a ‘serious’ portfolio",  is pure snobbery. It barely provides any quantitative analysis at all, and where it does, it's wrong.

Certainly, prize bonds are not for the very small investor. That is part of the nature of the beast. Getting consistent returns absolutely depends on investing enough to even out the probabilistic bumps. But if you understand this, and have enough to invest, the odds are in your favour compared to current deposit rates.

The article says "your 3% gross prize bond interest rate is notional – you could quite possibly win/earn nothing". Well, ok, but your equities could "quite possibly" lose money, or your bank could "quite possibly" go bust. Such statements are meaningless unless you can quantify the risk. You'd expect someone recommending investments in risk assets would understand that. With prize bonds, the risk can be thoroughly and rigorously analysed, unlike equities where "black swan" events occur with unknown frequency.

So, instead of nebulous statements, we can confidently say that if you have one prize bond the chances are 99.85% that you will nothing in a given year. But if you have a €100k investment the chances that you will win nothing are less than one in ten billion. Yes, you could "quite possibly win nothing" but the odds are utterly negligible. The odds of different levels of return are shown in the various histograms on this thread.

The strange statement attributed to the Prize Bond company in the article that "you have a 4/1 chance of winning something in any one year" is meaningless without mentioning a level of investment, and even then says nothing about the likely level of returns. 

The only thing I'd agree with in the article is that prize bonds "do not offer a straightforward rate of interest". Anyone who does not understand how larger investments lead to more consistent levels of return should steer clear of them.


----------



## MugsGame

Agreed, even get the minimum prize amount quoted was incorrect!


----------



## postman pat

..its gone quiet here..did someone of ye win the 1 million?...anyway zero today for me.. actually nothing for a while now....


----------



## monagt

> The only thing I'd agree with in the article is that prize bonds "do not offer a straightforward rate of interest". Anyone who does not understand how larger investments lead to more consistent levels of return should steer clear of them.


 Dub_Nerd




> http://www.businessinsider.com/27-t...as-it-struggles-to-keep-pace-with-inflation-3



Dub_Nerd, I rest my case.............. ¯\_(ツ)_/¯


----------



## The Ghoul

postman pat said:


> ..its gone quiet here..did someone of ye win the 1 million?...anyway zero today for me.. actually nothing for a while now....


Nothing for me since the 6th June!


----------



## Ravima

5 x €50 prizes since Jan on €8K holding.


----------



## dub_nerd

Ravima said:


> 5 x €50 prizes since Jan on €8K holding.


Seriously ahead of the odds there -- you should be averaging only about two wins per _year_!


----------



## SparkRite

So much for this "as a game of soldiers". 

€80 K "invested" since the end of May, not a sausage. :-(


----------



## niceoneted

Just going through mine. Have won 6 times. Of this 3 were from the one batch of 400 units bought 4 years ago. Only €50 each time.


----------



## postman pat

SparkRite said:


> So much for this "as a game of soldiers".
> 
> €80 K "invested" since the end of May, not a sausage. :-
> 
> Thats a bit surprising Sparkrite, but i think your wins will come...fingers crossed..


----------



## SparkRite

postman pat said:


> SparkRite said:
> 
> 
> 
> So much for this "as a game of soldiers".
> 
> €80 K "invested" since the end of May, not a sausage. :-
> 
> Thats a bit surprising Sparkrite, but i think your wins will come...fingers crossed..
> 
> 
> 
> 
> 
> Not just my fingers crossed, EVERYTHING CROSSED.
Click to expand...


----------



## The Ghoul

Nice surprise today, 50 euro cheque from the draw of the 27th June after the online bond tracker system said I had won nothing 

What happened was I purchased a batch of sequential bonds recently and entered a wrong letter on the online tracker. Didn't notice it until now as the win pattern from the "wrong" batch had exactly matched the win pattern from my actual batch!


----------



## The Ghoul

50 euros today from my 100k batch.

Anyone else have any good news?


----------



## usual

Nothing this week,,,, same nothing as last week,,,


----------



## postman pat

dry spell here too...


----------



## TomOC

TomOC said:


> Going much better now.  3; 50 Euro wins the past 5 weeks, 2 of them today.  The money has been in about 4.5 months now.



I won another 50 last week.  On 19000 for 8.5 to 9 months, I have won 4 50's which I'm happy enough with given the dropping interest rates in that time


----------



## The Ghoul

1 x 50 from the 100k batch


----------



## Kimmagegirl

I purchased a large amount of Prize Bonds last Friday week in my local Post Office. I got a phone call from my banks a few days later asking me to confirm that I had written a cheque for this large amount of money. This unnerved me a bit so I rang the Prize Bond department to confirm that they had received my order to purchase. They confirmed that they had and said that I should receive my Prize Bonds in a "few days".  These few days have come and gone and still no sign of them. How long does it normally take for the actual Bonds to arrive.
I think that a company named Fexco looks after the administration of the Prize Bonds?


----------



## Sunny

Kimmagegirl said:


> I purchased a large amount of Prize Bonds last Friday week in my local Post Office. I got a phone call from my banks a few days later asking me to confirm that I had written a cheque for this large amount of money. This unnerved me a bit so I rang the Prize Bond department to confirm that they had received my order to purchase. They confirmed that they had and said that I should receive my Prize Bonds in a "few days". These few days have come and gone and still no sign of them. How long does it normally take for the actual Bonds to arrive.
> I think that a company named Fexco looks after the administration of the Prize Bonds?


 
In the past, I have waited anything from days to weeks.....


----------



## monagt

> "If it's the million you really want, for better odds put your money in a top savings account, then use the interest to buy lottery tickets."


http://www.telegraph.co.uk/finance/personalfinance/savings/10873124/Earn-520-a-year-from-Premium-Bonds.html


----------



## dub_nerd

The most depressing thing about that, is that although Premium Bonds in the UK are tax free like Prize Bonds here, the tax on deposit interest is only 20% in the UK, and you can use your personal tax allowances against it too. So if you're a low earner your deposit interest is tax free in the UK, whereas here you pay 41% or 45% starting with the first cent. So paradoxically, even though interest rates are lower in the UK, savings accounts are more attractive. (There's also a limit on how much you can invest in Premium Bonds).


----------



## The Ghoul

50 today (100k batch)


----------



## postman pat

50 as well


----------



## The Ghoul

50 today from my 33k batch


----------



## MugsGame

No winners since €50 on 13th June on just under €100k worth


----------



## Squonk

€50 today for me. I invested €55k on 2nd April 2014. I have won €1250 in total so far (1x€1000+5x€50)....2.2% return in 4 months.


----------



## postman pat

zero today.......


----------



## The Ghoul

Decent day today, 2 x 50. 1 from the 100k batch, 1 from the 33k batch


----------



## postman pat

€50 today also... it seems €50 is the order of the day,not complaining though


----------



## SparkRite

Tis well for ye....


Nothing in the last 4 draws from 80K "invested". :-(


----------



## dub_nerd

The Ghoul said:


> Decent day today, 2 x 50. 1 from the 100k batch, 1 from the 33k batch



Ghoul -- when you get to your 12 month anniversary in a few weeks time it would be interesting to see a tot for your 100k batch. Looks like you are roughly on target for an average return, not including the serendipitous 1k win.


----------



## The Ghoul

That's correct dub_nerd. After 46 draws, the 100k batch has returned 1100 if you count the 50s and 100s. 

Or 900 if you count the 50s only. 

After 18 draws, the 33k batch has returned 200, all 50s. That is a bit ahead of what I'd expect.

All prizes were reinvested in Solidarity bonds as soon as the cheques arrived.

In the next few weeks I will be cashing in the 33k batch (need to pay a tax return with it) 

Roll on next Friday


----------



## The Ghoul

50 from the 100k batch. I'm having a pretty good run of late


----------



## SparkRite

Had my usual luck today.................................nowt!!


----------



## inflation

Anyone know how much is invested in prizebonds in total - am guessing it increased a lot in the last few years


----------



## postman pat

not a bean either...


----------



## dub_nerd

inflation said:


> Anyone know how much is invested in prizebonds in total - am guessing it increased a lot in the last few years


It's on the prizebond website, usually a few months out of date. It's something over €2bn, and yes has increased a lot in the last couple of years.


----------



## MugsGame

2 x €50 today, first win since 13th June, on just under €100k.


----------



## postman pat

€50 today...not so bad...


----------



## postman pat

Just one thought, the 1 million was won in Dublin this week.Does anyone here know or know someone who knows someone that has won the top prize?


----------



## monagt

> €50 today...not so bad...



Yes, but is it? 
Whats the cumulative amount, will you beat the best deposit net amount (if projected forward)


----------



## SparkRite

monagt said:


> Yes, but is it?
> Whats the cumulative amount, will you beat the best deposit net amount (if projected forward)




Well I CERTAINLY won't. :-( :-(


----------



## el diablo

Prize Bonds are a complete waste of time and money.   I'd rather put my cash in a 1% interest deposit account.   At least I'd get some sort of a return.


----------



## dub_nerd

el diablo said:


> Prize Bonds are a complete waste of time and money.   I'd rather put my cash in a 1% interest deposit account.   At least I'd get some sort of a return.



I presume you haven't bothered reading the early part of this thread. The likely returns on prize bonds are dependent on the amount invested. For €100k, on average you will beat the best current deposit rates. You have a 95+% chance of beating the best instant access deposit rates (net of tax), and a 75+% chance of beating the best one year term deposit (net of tax). How is that a complete waste?


----------



## Boyd

95% != 100%......Dublin had a 95% chance of beating Donegal today.....


----------



## el diablo

dub_nerd said:


> I presume you haven't bothered reading the early part of this thread. The likely returns on prize bonds are dependent on the amount invested. For €100k, on average you will beat the best current deposit rates. You have a 95+% chance of beating the best instant access deposit rates (net of tax), and a 75+% chance of beating the best one year term deposit (net of tax). How is that a complete waste?



I had a large four figure sum in Prize Bonds for several years and never won a cent.     I'm pretty sure the 95%+ you mention is inaccurate.


----------



## mandelbrot

el diablo said:


> I had a large four figure sum in Prize Bonds for several years and never won a cent.     I'm pretty sure the 95%+ you mention is inaccurate.



So you haven't read the early part of the thread where the numbers were crunched... 100k is a 6-figure sum, your investment was a fraction of that. Go read the maths and come back.


----------



## el diablo

mandelbrot said:


> So you haven't read the early part of the thread where the numbers were crunched... 100k is a 6-figure sum, your investment was a fraction of that. Go read the maths and come back.



I know the maths.   Prize Bonds are a complete waste of time (and money).   The Prize Bonds thread on www.boards.ie is evidence of this.    

Plenty of PB fanboys here tonight.


----------



## mandelbrot

el diablo said:


> I know the maths.   Prize Bonds are a complete waste of time (and money).   The Prize Bonds thread on www.boards.ie is evidence of this.
> 
> Plenty of PB fanboys here tonight.



Really? Where? I don't even own any prize bonds!  
Just amused that you'd feel the need to sashay in and dispense your wisdom with nothing to back it other than your own personal anecdote, which is of no statistical significance, without even bothering to have read the thread...


----------



## monagt

> The likely returns on prize bonds are dependent on the amount invested.



That can't be right, the probability of winning is the same no matter what amount is invested.


----------



## Laramie

Well I purchased €50k a few weeks back. I have had one €50 win so far. If I don't get a minimum return of 1% within a year then I will be putting it back on deposit.


----------



## mandelbrot

monagt said:


> That can't be right, the probability of winning is the same no matter what amount is invested.



It's to do with the distribution of the prizes, which is heavily skewed towards a very small number of very big prizes.

If you invest the minimum (is it €25?), how can you get the expected return? The minimum prize is €50...

If you have 1 prize bond you might get the expected return over a period of 1,000 years, but over a short period it's actually impossible.


----------



## monagt

> It's to do with the distribution of the prizes, which is heavily skewed towards a very small number of very big prizes.



But each individual PB has the same probability of winning (more or less, depends on methodology of actual draw)


----------



## The Ghoul

monagt said:


> But each individual PB has the same probability of winning (more or less, depends on methodology of actual draw)


While this is correct, in reality the size of the holding, the prize structure and a realistic timeframe for the investment also need to be taken into account. This has been explained on numerous occasions in this thread and it looks like some people still don't get it. 

I notice that earlier in this thread you attempted to compare PB returns with that from equities. Try purchasing shares on TDdirect with 25 euro (the minimum PB holding) and see how you get on. I'm not sure if TdDirect will even allow it as it would be simply absurd given that they charge a flat rate of 20 euro per trade.

I wouldn't blindly ignore the size of the investment and use the above to argue that shares are a crap/absurd investment. However that is exactly what some people do for PBs. "I bought x amount of PBs and never won anything in 50 years, they're crap, it's an idiot tax and no better than the Lotto" and so on.


----------



## monagt

> While this is correct, in reality the size of the holding, the prize structure and a realistic timeframe for the investment also need to be taken into account



Yes, these increase the probability (You place more bets to increase your chances of winning but you also increase your chance of losing)

You place €x = Result (€x  minus inflation & minus opportunity cost)

FirstTrade will place a buy for $6.95 (€5.28) and if you buy a blue chip, it will go up or at least provide a dividend of 2/3%.

I just do not see how Prize Bonds make sense except in the sense that I buy a Lotto ticket and wish for a win.

Put money on deposit and use Nett interest to play Lotto seems a better option in terms of winning 4/5 numbers on Lotto Plus and you still keep you Capital secure.


----------



## mandelbrot

monagt said:


> Yes, these increase the probability (You place more bets to increase your chances of winning but you also increase your chance of losing)



You've fallen at the first hurdle!  

The more you invest you increase your chance of winning, you cannot also increase your chance of losing. The 2 have to sum to 1.


----------



## mandelbrot

I'm going to try one more time MonagT but I've a feeling it's in vain...

If you could own every PB you would have a guaranteed rate of return, I assume you can see and accept that?

If someone else owns even a single PB, then there's a chance that they'll win the €1m prize, which makes up a proportionately large % of the expected return. 

That's about as simple as I can make it, maybe someone more eloquent can make a better fist of it..!


----------



## monagt

> f someone else owns even a single PB, then there's a chance that they'll win the €1m prize, which makes up a proportionately large % of the expected return.



Yes, I understand what you are saying but I am dealing in probability & risk and reward.



> The more you invest you increase your chance of winning, you cannot also increase your chance of losing. The 2 have to sum to 1.



This is why the Casinos win and the Punters lose.

In practice, most people hang on to the money for fear of missing out on €1m in the next prize draw. When the money is finally withdrawn, often not until the bondholder has died, it will almost inevitably have been ravaged by inflation.


----------



## Gerry Canning

Donegal won, so my 10euro@7to 1 , is onto prize bonds.
Although unlike Prize Bonds we didn,t need luck.


----------



## monagt

> Although unlike Prize Bonds we didn,t need luck



Amen to that.........Dublin only had to turn up


----------



## dub_nerd

Apologies in advance for a long post. Because most people probably won't bother reading it, I'll say up front: don't invest €100 or €1,000 in Prize Bonds and expect to win anything. You almost certainly won't.

I said elsewhere on this thread that if you don't understand the odds, Prize Bonds are not for you. Understanding probabilities does not seem to come easy to many people. There is also the fact -- well documented by psychologists in many studies -- that we tend to be over-optimistic about the risks we take.

Let's look at some of the objections. Dublin had a 95% of beating Donegal in the football. If you'd bet on them you would have lost your shirt. Actually, the best odds offered by Paddy Power were about 91% ( = 10 to 1 on). The total odds given for the three possible outcomes also sums to 109%, so if the odds offered reflect the actual amounts of money laid (which they will -- it's a bookie!), Paddy Power have a 9% margin no matter which way the cookie crumbles.

Prize Bonds differ from this in two crucial ways. First, the margin is in the punter's favour. The Prize Bond company pays out more than it takes in, since a percentage is paid out in prizes and the bonds themselves are always redeemable. Of course, there are the important matters of inflation and the opportunity cost versus other investments, but the point remains -- you can't "lose your shirt".

The second, and perhaps more important point (and certainly the least understood) is that, unlike Dublin vs. Donegal, you are not betting on a single event. Bear with me, and consider the following. Suppose you had €100k to invest and you knew you could get 2.5% return on deposit. Someone comes to you and says: "Instead of putting the money on deposit, lend me your money for a year. At the end of the year I'll give you your money back. We'll also flip a coin. If you win the toss, I'll give you a €5k bonus, otherwise you just get your €100k back and no bonus". Well, it's easy to see that this is the same as taking the €2.5k you would have earned on deposit, and betting it on the flip of a coin to either double it or lose it. Would you bet €2.5k on a coin toss? Probably not.

Now let's change the scenario. Instead of one coin toss at the end of the year, we'll have a hundred coin tosses and divide the €5k bonus across them. For every one you win, you get a bonus of €50. You get nothing for each toss you lose. You can still win a maximum of €5k. Are you gambling away your €2.5k on a coin toss now? Not at all. Clearly things are different. The most likely outcome is that you will win 50 coin tosses and get a €2.5k bonus, the same as your deposit rate. 

Now, here's the bit that's really hard to understand. Even though winning 50 out of 100 coin tosses is _the *most* likely outcome_, it is still _a very unlikely outcome_. The odds are only 8%, or less than one in twelve. But here's the thing: you also have a slightly lower but still nearly 8% chance of winning 49 tosses, or 51 tosses. The total chances of getting between 49 and 51 wins adds up to nearly 25%, or one in four. This give you a decent chance of getting only slightly worse, or slightly better than your 2.5% return. But of course, the same applies to 48 wins or 47 wins or 52 or 53. With a hundred tosses there is a great chance you'll get _near_ the average return (higher or lower) even though the chances are quite low that you'll get _exactly_ the average return.

What if, instead of 100 tosses, there were only 10, or 5, or 2? Well then the odds get "lumpier". We know that for a single coin toss you are basically gambling on an evens chance. Heads you get €5k, tails you get nothing. For two coin tosses worth €2.5k each, you have one chance in four of winning nothing, one in four of winning €5k, and two in four of winning €2.5k (on either the first toss or the second toss). With more and more tosses, and dividing the prizes up evenly across the tosses, the odds of an "average" return get better and better. You become less and less likely to get no return at all, or the maximum possible return.

So, to understand Prize Bonds, you have to understand that the amount you invest determines the "number of tosses". On one Prize Bond or 100,000 Prize Bonds, you will get the same percentage return in the long run -- but it might take thousands of years with the single Prize Bond. You are much more likely to get an average return with the higher number of Prize Bonds.

So with all that said, let's go back to the specific objections raised:



dub_nerd said:


> The likely returns on prize bonds are dependent on the amount invested.





monagt said:


> That can't be right, the probability of winning is the same no matter what amount is invested.



Yes, you are right, the _percentage return_ will be the same in the long run no matter how much is invested. But to get that percentage return in a timeframe of one year, or any other specific timeframe, the odds of achieving it with a low investment are negligible. You'll get your money back some day, but humans have a limited investment time horizon by definition. The "odds" I am talking about are not the betting odds, which are the same for everyone as you say, but _the odds of getting the average return in a given timeframe_. That's a completely different thing -- the "likely returns" versus the returns that are guaranteed as long as you have an infinite amount of time to wait.



monagt said:


> This is why the Casinos win and the Punters lose.



Casinos win because, like Paddy Power, they have a margin on the odds. For example, they pay out evens on red/black at roulette but the actual odds _aren't_ evens because of the green zeros. They understand that although they could lose -- every now and again someone beats the house over a single evening -- in the long run, over literally millions or billions of games, they cannot lose. They will get their guaranteed percentage. The same is true of Prize Bonds. In this case the margin is in your favour. Over billions of draws, you will get your guaranteed percentage. However, if you have one Prize Bond it will take hundreds of years for it to be entered in billions of draws. If you have €100k in bonds, you get entered in 16,000 times more draws than a single bond. This does not change your average percentage return, but it dramatically changes how long it takes to achieve it.



username123 said:


> 95% != 100%......Dublin had a 95% chance of beating Donegal today.....



Yes, but even with the odds heavily in your favour there was still an appreciable chance that you would lose everything. You cannot lose everything on Prize Bonds. Not only that, but when I say there is a 95% chance that you will beat the deposit rate if you put €100k into Prize Bonds, I don't even mean there is a 5% chance that you will get zero return. In fact, your chances of getting at least half the net instant access deposit rate are 99.99%. There is a negligible 0.01% chance of you getting less than half. Don't forget the upside odds too. As well as a 95% chance that you will get at least the instant access rate, there is a 5% chance that you will get double that. And there is a nearly 50% chance that you will get one and a half times the instant access rate.



el diablo said:


> I had a large four figure sum in Prize Bonds for several years and never won a cent. I'm pretty sure the 95%+ you mention is inaccurate.



This is a total misunderstanding (albeit a completely common one). The numbers I quoted are for €100k invested. How many people noticed I was talking specifically about €100k and _only_ that amount in the previous paragraph? I reckon no matter how many times I say it, nearly everyone looks at that and, like you, thinks "wow, he's saying I have a 95% of getting a better return from Prize Bonds than on deposit". They leave out the €100k which is completely crucial to the calculation. Your odds for a "large four figure sum", lets say €5k, are completely different. You have a nearly one in three chance of getting _nothing at all_ in a given year. (Incidentally, the comparison to the demand deposit rate is different too, because you can get a better rate on €5k than €100k -- the banks limit the amount on which they pay better rates).

***

The calculations for working out your likely returns for any given investment in Prize Bonds are complicated. (I'll happily show the maths here if anyone is interested. I also have a spreadsheet, but you'll need Excel 2010 or later with macros enabled -- I use macros for Stirling's approximation for large factorials. You'll also need at least a decent grasp of arithmetic to understand what the spreadsheet is telling you, even if you don't care about the underlying maths). Unfortunately you can't just do the calculation once and extrapolate from one amount, say €100k, to another, say €5k. You can't just divide by 20 -- it's a different calculation in each case. There are some graphs for different amounts earlier in the thread.

Disclaimer: I haven't invested in Prize Bonds myself, but only because of extenuating circumstances. I'd happily invest a large 6-figure sum, and may well yet do it. I definitely wouldn't do it with a 4-figure sum, or most 5-figure sums, for the reasons outlined above. Hence the warning in the very first paragraph. But for my large 6-figure sum I'd happily bet anyone here that I will do as well or better than the demand deposit rate after tax. The odds are better than twenty to one in my favour.


----------



## Boyd

Youre ruining it for the rest of us then


----------



## dub_nerd




----------



## Fella

Great post dub nerd don't know what your work is but you could make a good living as a professional gambler with that knowledge base.


----------



## kennyb3

I'm sure it's been covered but this thread is huge - do i need to go through full procedure ID wise to buy my second bond or is there some way I can just top up/post off a cheque without everything again?


----------



## dub_nerd

kennyb3 said:


> I'm sure it's been covered but this thread is huge - do i need to go through full procedure ID wise to buy my second bond or is there some way I can just top up/post off a cheque without everything again?



I think The_Ghoul might have answered this when he bought a second tranche. Hopefully he'll answer it here for you.


----------



## dub_nerd

Fella said:


> Great post dub nerd don't know what your work is but you could make a good living as a professional gambler with that knowledge base.



I'll take that as high praise, coming from you. I followed (what became) your gambling thread with total fascination -- I could picture a lot of readers' jaws dropping at your description of your activities. I think you probably have the mathematical acumen _and_ the talent / temperament to be able to deal with the gambling highs and lows. I don't think I could do it with such equanimity. But thanks for the thought.


----------



## The Ghoul

kennyb3 said:


> I'm sure it's been covered but this thread is huge - do i need to go through full procedure ID wise to buy my second bond or is there some way I can just top up/post off a cheque without everything again?


I went through the full procedure for my second batch. I know that you can buy online using a debit card and there may be other methods too but in my case for my second batch I went to the post office with form, draft and proof of address/PPS/ID.

There is a section on the form where you enter your existing account number (if any)


----------



## dub_nerd

I mentioned I'd prefer to invest a six-figure amount than most five figure amounts in Prize Bonds. Someone asked me what sort of five figure amount would be acceptable. My answer is that you can choose your own odds. Remember, for the purposes of this discussion, we are talking about the odds of achieving an "average" return in a year. Prize Bonds pay out 1.6% of the invested fund in prizes. But since some of that is in very rare high value prizes, you are best depending only on the most numerous €50 prizes, which represent 1.18% of the fund annually. That is what I mean by the average return. If you pay 41% DIRT this is equivalent to an APR of 1.99%. If you also pay 4% PRSI it grosses up to 2.14%. (All figures to two decimals).

So the question is what are your odds of getting that 1.18% net return? _These_ odds are what vary depending on the size of your investment. On page 7 of this thread, I posted this graph:







The idea is that it shows you the chance of winning each particular number of individual €50 prizes for a given investment amount. Here is the same data in tabular form (there are more precise values in the attached .csv file which can be loaded in Excel):











So here's how it works. You have to win an integer number of prizes. You can't win half a prize. So, for any given investment amount, multiply by 1.18% and divide by 50. Round to the nearest integer. This gives you the number of prizes you have to win to get as close as you can to the average return.

Let's take €50k as an example. A 1.18% return is €590. Divide by €50 and round to the nearest integer. This gives us 12 prizes for a return of 1.2%, slightly better than average. So now look at the table above. Each column heading is a number of prizes that you could win in a year. Look at the €50k row. The values to the right of the €50k are the odds of winning that number of prizes. Since we want to win 12 prizes, lets add up the odds of getting _less_ than 12, and the odds of winning 12 _or more_ will be one minus that number. That's all the columns from 0 to 11. Using my more precise values, they sum to 48.93%. That means I have a 51% chance -- just about evens -- of achieving the average return.

That might be good enough for you, or it might not. It's up to you. Of course, don't ignore that if we include the 11, 10, and 9 columns, it gets us up to an 83% chance of winning at least three quarters of an average return. It's never all or nothing. And, of course, you have a non-negligible chance of winning _more_ than the average return (which can be worked out in a similar way). If you want to improve the odds of achieving close to an average, invest more. You can use this approach for any amount in the above tables.

If you look at €100k, you will see that you only have a 49% chance of getting a 1.2% return, no better than the €50k amount. But you have a 90% chance of getting at least three quarters of that (which, as I mentioned earlier, is still better than the net instant access rate, which you have a 95% chance of beating). In general the odds of getting "near" the average improve with higher investments. Taking a glass-half-empty approach (as I tend to), and asking "how likely am I to get a very _poor_ return?" ... the answer is "much more likely for small investments". As an extreme example, you can see that for €10k or €5k (and even more so for any amounts less than that) there is a substantial chance of winning nothing at all! (But, as I always point out, if you can wait decades or centuries, you'll still get your 1.18% eventually. Indeed, if you can wait millennia, you'll get your 1.6%).

EDIT: not sure how to do an attachment, so here's the csv data on PasteBin.

EDIT2: For the best net instant access rate for €100k I have been using the PTSB rate from the Best Buys thread of 2% on the first €50k and 1% thereafter. Deducting 45% tax from this give an average net rate of 0.825%. I see that there is a slightly better KBC rate which nets out to 1.01%, which affects my figures marginally. (I also see a Rabo 90 day notice rate which I must take up myself ... thanks as always, Ciaran T!)


----------



## postman pat

monagt said:


> Yes, but is it?
> Whats the cumulative amount, will you beat the best deposit net amount (if projected forward)



Yes I am beating the deposit rate comfortably..and i must say as I said before there is a sense of excitement/expectation ever Friday brings is as the ad for a certain credit card says is "priceless"


----------



## monagt

> Yes I am beating the deposit rate comfortably..



Well done.........keep it up.


----------



## dub_nerd

To coin a phrase .... "the beatings will continue until the deposit rate improves".


----------



## The Ghoul

I'm going to withdraw my 33k batch this week not because I'm unhappy with how things are going but because I need the cash to pay a tax return soon which was the plan from the start.

33,000 invested for 14 draws (not 20 as I mistakenly said in a previous post)
Wins 4 x 50 = 200 euro
That works out at an annual rate of 2.25% net

For comparison, the best 3 month fixed term deposit in the best buys thread is the KBC 3 month fixed term with an annual rate of 1.85% gross minus 41% DIRT. I calculate that would have paid about 90 euros interest. Now with dropping interest rates maybe I would have gotten a better rate 3 months ago but not by much.

3 months is a very short time period but on this occasion at least, PBs have done well compared to a deposit account.

I will shortly be buying another batch of PBs to the value of 75k


----------



## postman pat

The Ghoul said:


> I'm going to withdraw my 33k batch this week not because I'm unhappy with how things are going but because I need the cash to pay a tax return soon which was the plan from the start.
> 
> 33,000 invested for 14 draws (not 20 as I mistakenly said in a previous post)
> Wins 4 x 50 = 200 euro
> That works out at an annual rate of 2.25% net
> 
> For comparison, the best 3 month fixed term deposit in the best buys thread is the KBC 3 month fixed term with an annual rate of 1.85% gross minus 41% DIRT. I calculate that would have paid about 90 euros interest. Now with dropping interest rates maybe I would have gotten a better rate 3 months ago but not by much.
> 
> 3 months is a very short time period but on this occasion at least, PBs have done well compared to a deposit account.
> 
> I will shortly be buying another batch of PBs to the value of 75k



Ok Ghoul,
            Could you let us know on here,how easy/hard it is to cash in your bonds and how long it takes to get the money into you bank account etc.I havent sold any yet so I dont know about this.

anyway thanks in advance


----------



## The Ghoul

Will do, postman. I'm going to select the electronic repayment option on the form.


----------



## monagt

Has the month where the money is with the PB but NOT included in a draw factored in??


----------



## The Ghoul

monagt said:


> Has the month where the money is with the PB but NOT included in a draw factored in??


Incorrect, it's not a "month". There are 4 draws most months and 5 in some months. On both my recent purchases I missed 1 draw between handing in my form and draft in the post office and having it entered in a draw.

eg for the first batch
Date of draft: 24th September 2013
Date on PB cert: 30th September 2013
My first draw: 4th October 2013 (won 50 euro)
Missed draw: 27th September 2013

Had I timed my purchase better or bought online I may not have missed a draw at all. 

On the way out, based on the PB FAQ I expect to miss 1 draw at most.

So add 2 missed draws to my 14, that reduces my return to 1.97% NET on my 33k - still ahead of what I'd get GROSS from the best currently available deposit account for the same period.

And the longer the term, the less significant the two missed draw would be. 3 months is very short, in fact it's the minimum investment period for PBs.


----------



## dub_nerd

The Ghoul said:


> Will do, postman. I'm going to select the electronic repayment option on the form.



If you choose the electronic payment option, do you still get a postal notification on each win in the post, i.e. a letter per week if you win that often? I haven't seen an option to be notified by email.


----------



## The Ghoul

dub_nerd said:


> If you choose the electronic payment option, do you still get a postal notification on each win in the post, i.e. a letter per week if you win that often? I haven't seen an option to be notified by email.


I don't know dub - when I purchased I chose to have them send me a cheque when I win. It is a waste of paper as I get a free post envelope and a PB brochure with every cheque. I'm not even sure what the envelope is for as it goes straight in the bin. 

When I get a cheque I just bring it to the PO with my National Solidarity Bond card and buy a SB which handily has a min amount of 50 euros. This will likely result in more paper when those SBs start to mature! So I might revise my approach and go for electronic payments or automatic reinvestment for future PB purchases - particularly if I'm going for larger amounts with the expectation of more wins.

When purchasing SBs using the card the PO will combine cheques but not cheques with other payment methods. So If I have two 50 euro cheques and also want to get a SB for 1500 euro with my debit card, I get two SBs, one for 100, one for 1500.

For clarity, when I mentioned electronic payments in the previous post I was talking about the option on the repayment form for return of capital rather than the option for the prize payment method on the purchase form.


----------



## The Ghoul

Just posted repayment form (3/9/14). Let's see how long it takes for the funds to appear in my bank account via electronic transfer.


----------



## dub_nerd

Thanks Ghoul.

Another question popped into my head about the way the Prize Bonds draw is conducted. Having just re-read the Prize Bond FAQ I think I've been making a wrong assumption. Is each bond entered into a separate draw for each individual prize?

There are two (main) ways it could be done. There are over 9,000 x €50 prizes each week. You could have a separate draw for each one. The logistics of this would be no problem since it's computerised. You would draw a winning bond randomly from among all the bonds for the first €50 prize. Then repeat for the second, and so on.

The alternative is that there is a single weekly draw. 9,000+ bonds are drawn randomly from the full set to be the winners for the €50 prizes. The major difference would be that in the first scenario, a single bond could win more than once. (In theory it could win _all_ the prizes in one week, although the odds would be one in some number with over 75,000 zeroes after it). In the second scenario, each bond can only win once per week.

FAQ #7 says: "With Prize Bonds you are eligible to win not just once, but every week for as long as you hold your bonds. Each individual bond is eligible to win _*one prize*_ in every draw."

That doesn't answer it conclusively, but then #8 suggests that there is a single weekly draw, not 9,000+. Furthermore, the single weekly draw would seem to include not just the €50 prizes, but all the others too.

This will make some sort of difference to the odds. Quite likely it won't be a significant one ... but I need to go back and figure out how you would even mathematically model the second scenario.


----------



## usual

I'm also of the belief that I'm ahead on return.Invested Feb 2013 and 1.9% after 1 year..Even slightly better this year,but will do the maths at weekend...Will be cashing in soon as something else has come up,but enjoyed `that Friday feeling and the fact that cash was available at short notice...
Was surprised that I could not be notified by email of wins,,,I share a mailbox and it was blatantly obvious when letters arrived informing me of each win...I would have thought in this day and age ,it would be cheaper and easier to send notifications via e-mail.


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## Janet

dub_nerd said:


> Thanks Ghoul.
> 
> Another question popped into my head about the way the Prize Bonds draw is conducted. Having just re-read the Prize Bond FAQ I think I've been making a wrong assumption. Is each bond entered into a separate draw for each individual prize?
> 
> There are two (main) ways it could be done. There are over 9,000 x €50 prizes each week. You could have a separate draw for each one. The logistics of this would be no problem since it's computerised. You would draw a winning bond randomly from among all the bonds for the first €50 prize. Then repeat for the second, and so on.
> 
> The alternative is that there is a single weekly draw. 9,000+ bonds are drawn randomly from the full set to be the winners for the €50 prizes. The major difference would be that in the first scenario, a single bond could win more than once. (In theory it could win _all_ the prizes in one week, although the odds would be one in some number with over 75,000 zeroes after it). In the second scenario, each bond can only win once per week.
> 
> FAQ #7 says: "With Prize Bonds you are eligible to win not just once, but every week for as long as you hold your bonds. Each individual bond is eligible to win _*one prize*_ in every draw."
> 
> That doesn't answer it conclusively, but then #8 suggests that there is a single weekly draw, not 9,000+. Furthermore, the single weekly draw would seem to include not just the €50 prizes, but all the others too.
> 
> This will make some sort of difference to the odds. Quite likely it won't be a significant one ... but I need to go back and figure out how you would even mathematically model the second scenario.


I have always assumed that it's one big draw and every bond is entered into that and can only be pulled maximum once every week. Prize bonds have been going for a long time, longer than the widespread availability of computers, haven't they - it might be completely unrealistic but I've always had this image of men in brown suits with the equivalent of a big giant hat, pulling numbers out while someone on the side with a clipboard carefully notes them down.   I would never have thought each bond has a chance to win 9,000 draws every week. Each bond has a chance to win one prize in one big draw every week.


----------



## dub_nerd

Yep, Janet, that sounds a whole lot more sensible than my hare-brained notion. 

Unfortunately, that makes the maths a whole lot harder. Until now I only had to muck around with the number of 23-digit subsets of a 470,000 digit number


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## Laramie

Janet said:


> I have always assumed that it's one big draw and every bond is entered into that and can only be pulled maximum once every week. Prize bonds have been going for a long time, longer than the widespread availability of computers, haven't they - it might be completely unrealistic but I've always had this image of men in brown suits with the equivalent of a big giant hat, pulling numbers out while someone on the side with a clipboard carefully notes them down.   I would never have thought each bond has a chance to win 9,000 draws every week. Each bond has a chance to win one prize in one big draw every week.



Interesting. I wonder has the same Prize Bond ever won twice during the same draw?


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## monagt

> nteresting. I wonder has the same Prize Bond ever won twice during the same draw



This would affect the odds...


----------



## The Ghoul

The Ghoul said:


> Just posted repayment form (3/9/14). Let's see how long it takes for the funds to appear in my bank account via electronic transfer.


I seem to have won 50 euros from this batch today so they have not processed the repayment yet - assuming of course that the numbers have not already been sold and purchased by someone else! Will have to await the cheque to confirm.


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## SparkRite

Zilch AGAIN today, that's nowt since 15th July. :-(


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## usual

Zero today,,,but 3x50 last week so was not expecting a win again today...


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## postman pat

€50 today.. as a sidenote never received my cheque for last weeks win, rang them said they will reissue the cheque once I sent a note to confirm same,anyone else have a problem?


----------



## niceoneted

Haven't won anything since march on 25k investment. I look at is as my lotto draw every week. I see lots of people around me spending upwards of €20 a week on lotto and winning nothing. At least I get to keep my money even if its earning f**k all..


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## dub_nerd

usual said:


> Zero today,,,but 3x50 last week so was not expecting a win again today...


The draws are all independent events, so winning any number in a previous week has no bearing at all on your chances of winning again.


----------



## Laramie

postman pat said:


> €50 today.. as a sidenote never received my cheque for last weeks win, rang them said they will reissue the cheque once I sent a note to confirm same,anyone else have a problem?



If you weren't checking your numbers and you never received your cheque would you even know if you had won?

If the cheque is not cashed is another re-issued or are you sent a reminder?

If someone interferes with your win and claims it for themself would you be any the wiser?


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## Janet

dub_nerd said:


> Unfortunately, that makes the maths a whole lot harder. Until now I only had to muck around with the number of 23-digit subsets of a 470,000 digit number


Well, at least it'll give you something to do over the weekend. Keep you out of mischief, like.


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## Silvera

Laramie said:


> If you weren't checking your numbers and you never received your cheque would you even know if you had won?
> 
> If the cheque is not cashed is another re-issued or are you sent a reminder?
> 
> If someone interferes with your win and claims it for themself would you be any the wiser?



Good questions!!

I rarely check my PB numbers online, and assume the cheque will just arrive whenever I win (as it has in the past, many times). After postman pat's recent experience of not receiving his winning cheque it would make you wonder??

I've been following this thread with great interest...being a PB 'investor' too


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## The Ghoul

Just on the repayment procedure timeframe

3/9/14 - sent repayment form with instruction to repay by EFT to my current account. Form went in that day's post.
4/9/14 - checked my current account online, no repayment yet
5/9/14 - one of the bonds that I had requested repayment for won 50 euros, the question is had the bond already been issued to someone else. Checked my current account in the early afternoon after the draw, no repayment yet
6/9/14 - the repayment funds are now showing up in my current account with the transaction dated 5/9/14

I would say that that demonstrates very good efficiency by the PB company. They say that _"_*Repayments are subject to 7 working days notice from the date of receipt*" However in my case it looks like it took 1 working day and I may well have won a prize on the same day that the bonds were repaid.

So now I need to wait a few days to see if I did indeed win a prize - will have to wait for a cheque in the post as I setup that batch to pay prizes by cheque rather than EFT.


----------



## dub_nerd

Silvera said:


> Good questions!!
> 
> I rarely check my PB numbers online, and assume the cheque will just arrive whenever I win (as it has in the past, many times). After postman pat's recent experience of not receiving his winning cheque it would make you wonder??
> 
> I've been following this thread with great interest...being a PB 'investor' too


Could explain the theory about older bonds winning less often. Once someone in the "supply chain" notices regular cheques going past, they start mysteriously disappearing. 

Just kidding!


----------



## The Ghoul

The Ghoul said:


> Just on the repayment procedure timeframe
> 
> 3/9/14 - sent repayment form with instruction to repay by EFT to my current account. Form went in that day's post.
> 4/9/14 - checked my current account online, no repayment yet
> 5/9/14 - one of the bonds that I had requested repayment for won 50 euros, the question is had the bond already been issued to someone else. Checked my current account in the early afternoon after the draw, no repayment yet
> 6/9/14 - the repayment funds are now showing up in my current account with the transaction dated 5/9/14
> 
> I would say that that demonstrates very good efficiency by the PB company. They say that _"_*Repayments are subject to 7 working days notice from the date of receipt*" However in my case it looks like it took 1 working day and I may well have won a prize on the same day that the bonds were repaid.
> 
> So now I need to wait a few days to see if I did indeed win a prize - will have to wait for a cheque in the post as I setup that batch to pay prizes by cheque rather than EFT.


Got my cheque today  that means I "missed" one draw on the way in and no draw on the way out.

15 draws + 1 missed = 16 draws/weeks

5 x 50 wins on 33,000

Annual interest rate works out at 2.46% NET - well ahead of what I would have gotten on deposit.

Also, last Friday after 12:30 I purchased another batch of PBs to the value of 75k. Hopefully I'll receive them before this Friday's draw!


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## Squonk

2x€50 today for me. I invested €55k on 2nd April 2014. I have won €1350 in total so far (1x€1000+7x€50)....2.7% return in ~5 months....very happy!


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## SparkRite

"And here are the results from the Prize Bond jury...................Sparkrite........Nul Point"


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## postman pat

not a bean either today....also sent off letter to prizebond company about missing cheque, no response yet.


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## The Ghoul

I now have a batch to the value of 75k as well as a batch to the value of 100k. I purchased the 75k last Friday afternoon and they were in today's draw so no draw was missed on the way in.

Today's winnings
50 from the 100k batch
0 from the 75k batch


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## Tertonmike

Have read right through this thread with great interest.  A great effort by dub_nerd and others to impose some sort of mathematical order on the prize bonds proposition, for which much thanks!

I have just run a couple of exercises based on dub_nerd's table on p.13 to assess the chances of achieving or bettering the suggested target return of 1.18% and a slightly higher 1.25% as a control/reference.  Please correct me if I am wrong but it seems to me that, as well as allowing for the "lumpiness" of the particular distribution for any given level of investment, the lumpiness of the actual return in prize money has to be taken into account.  This is because the actual returns based on €50 prize intervals that meet or better the target varies for each level of investment (actually from 1.19% to 1.5% for a target of 1.18%), consequently the probability of achieving or bettering a fixed target does NOT increase smoothly as the amount invested rises.

My results suggest that the best chances of making 1.18% or better (using €10,000 intervals up to €100,000 as per the chart on p. 13 of the thread) are in fact given by investments of:
1. €80,000 (51.37%)
2. €50,000 (51.08%)
3. €20,000 (50.61%)
In comparison the probability of making 1.18% or better on an investment of €100,000 appears to be only 48.79%.

Using a slightly higher target rate of return of 1.25%, "prize lumpiness" means that the best investment amounts change to:
1. €20,000 (still at 50.61%)
2. €40,000 (46.62%)
3. €60,000 (43.15%)
cf. only 40.71% for €100,000.

Of course this effect may be partly or wholly offset by:
A. The fact that the actual return on investment amounts with a lower probability of hitting/exceeding target may be higher IF the target is met; and/or
B. The point made in previous posts, that with higher investment amounts, the smoothing of the return curve yields a greater chance of just exceeding or just falling short of target.

BUT it seems to be that a decision on the optimum amount to invest in Prize Bonds should not rest on a simple assumption that the probability of making any given target return inevitably and smoothly rises as the amount invested increases.

P.S. Any further work done on the effect of 1 weekly draw for 9,000 prizes vs. 9,000 individual draws p.w.?


----------



## The Ghoul

100k batch - nothing
75k batch - nothing

2 weeks without a win from my newly acquired 75k batch. So much for the "new bonds" conspiracy theory


----------



## dub_nerd

Hi TertonMike, glad you're finding it interesting. I've a big project deadline next week so don't have too much time to spend. I'm not totally sure you're interpreting the figures right.

The odds of getting an "average" return or better in a year are always going to sum to about 50% for any investment (except where the investment is so low that the average return is less than a single prize, i.e. below the 5k mark). However, this is not the full story. In fact it's tautological -- the average return is the average because you're equally likely to get more or less than it, and the distribution is symmetrical. (The reason you're probably seeing 48% for 100k is because the table only gives two decimal places so there are rounding errors ... in my spreadsheet version it is more exact.

What you really need to look at is the likelihood of getting, say, only half the average return, or any amount that is not the average. This is what gets less and less likely with a large investment. Big investments generate "smoother" returns. Of course, with smaller investments you're about as likely to get 50% more than the average as you are to get 50% less. The point is, though, you are taking a gamble either way. The idea of the large purchase is to turn it from a gamble into an investment.

Re: the single weekly draw vs. 9,000 I haven't managed to fully analyse it but I have a convincing argument that the odds are extremely little changed from the method I'm already using. Will write a note on it sometime.

Cheers.


----------



## theresa1

I finally gave in and purchased €800 (not much I know) in prize bonds today. It was beginning to annoy me and I said sure I 'll give it a try. I might build up to €10,000 but probably wouldn't go any higher.

Don't worry I wont be posting every week, I'll leave that to The Ghoul.


----------



## Boyd

Unfortunately the reason you probably wont be posting is due to not winning anything! As explained above, the less PB you have, the chanced of winning drop dramatically. You need in excess of 10K really.

As explained here: http://www.askaboutmoney.com/showpost.php?p=1398663&postcount=248



> As an extreme example, you can see that for €10k or €5k (and even more so for any amounts less than that) there is a substantial chance of winning nothing at all!


----------



## dub_nerd

theresa1 said:


> I finally gave in and purchased €800 (not much I know) in prize bonds today. It was beginning to annoy me and I said sure I 'll give it a try. I might build up to €10,000 but probably wouldn't go any higher.
> 
> Don't worry I wont be posting every week, I'll leave that to The Ghoul.


As u123 says, this is pointless. You will win a €50 prize on average less than once every five years. But there is a significant chance you could go 10 or 20 years without a prize (you could always win in less than five, of course). The question is, do you want a significant chance of getting nothing? A deposit rate of 1% after tax will get you almost €50 in five years. Why would you take a significant risk of getting nothing?

As an _investment_ (as opposed to a gamble) the only way that prize bonds make sense is that the average return is somewhat above typical after-tax deposit rates _and_, (this is the important bit) for very significant investments -- meaning at _least_ multiple tens of thousands -- you have a good chance of getting close to the average return. Caution is not what you want with prize bonds -- paradoxically it makes good sense to buy €100,000 worth, but none at all to buy €100 worth.


----------



## The Ghoul

2 x 50 today from the 100k batch - nice  Nothing from 75k batch - 3 weeks in a row now. 

The below image shows my return from the 100k batch. This is for 52 draws or 53 if you include the "missed" one after I handed over my draft in the post office.


----------



## Silvera

Being a prize bond investor, I follow this thread with great interest!

I first started buying prize bonds (in small amounts, usually around IR£100 or so) from around 1989 onwards. Since then I have built-up a nice 'portfolio' of bonds in varying amounts....the largest being a recent €20k purchase. My question is - Would I be better off cashing-in all my bonds and making one large bond purchase using the full amount of the cashed-in bonds?

It would seem to be a good idea based on the discussions on this thread regarding 'larger amounts = better returns' ?!


----------



## Mrs Vimes

Silvera said:


> My question is - Would I be better off cashing-in all my bonds and making one large bond purchase using the full amount of the cashed-in bonds?
> 
> It would seem to be a good idea based on the discussions on this thread regarding 'larger amounts = better returns' ?!



The better returns refer to the expected returns for a person being the sum total of the expected return of each individual prize bond held. If you held all of the prize bonds ever issued then you would win all of the prizes. When the prize bonds were purchased is immaterial, although there is a reference earlier in this thread to newer bonds winning more often. Seems to be a conspiracy theory though


----------



## dub_nerd

Silvera said:


> Would I be better off cashing-in all my bonds and making one large bond purchase using the full amount of the cashed-in bonds? It would seem to be a good idea based on the discussions on this thread regarding 'larger amounts = better returns' ?!



Selling all your bonds and buying them back again wouldn't make them a larger amount.


----------



## dub_nerd

So, Ghoul, if I'm counting it right, after a year your €50 prizes add up to €1,100 or 1.1%, i.e.  within a whisker of the average return. On top of that you have the nice bonus of the 2 x €100, which is three times the 0.65 of them you should win on average (although you won them before Jan 2014, when the number of €100 prizes went down significantly). And the icing on the cake is the wholly fortuitous €1,000 prize which was a one in 80 chance. That brings you to a 2.3% tax free return, which is pretty much double what you might reasonably have expected, and grosses up to the equivalent of a 4.18% return from a taxable deposit. Not bad at all!


----------



## dub_nerd

Janet said:


> I have always assumed that it's one big draw and every bond is entered into that and can only be pulled maximum once every week. Prize bonds have been going for a long time, longer than the widespread availability of computers, haven't they - it might be completely unrealistic but I've always had this image of men in brown suits with the equivalent of a big giant hat, pulling numbers out while someone on the side with a clipboard carefully notes them down.   I would never have thought each bond has a chance to win 9,000 draws every week. Each bond has a chance to win one prize in one big draw every week.



So, I promised I'd come back to this. Haven't had time to think about how to calculate it more correctly. But I thought I might set out the calculations I was using for odds so far, and see if any maths guru out there can help amend it for the situation Janet is talking about, where each bond can only win once per week.

The question I originally wanted to answer was "what are the odds of winning a particular number of times in a year, with a particular number of prize bonds?". I decided I should start with some simpler examples. What are my chances of winning two out of three coin tosses? The chances of _anything_ happening are: the number of ways the given thing could happen, divided by the total number of things that could happen. For example, the chance of throwing a three on a dice are: one way a three can come up, out of six different numbers that could come up, i.e. 1/6. What about our three coin tosses? I can write down the possible outcomes as a sequence of heads (H) and tails (T):

1: H H H
2: H H T
3: H T H
4: H T T
5: T H H
6: T H T
7: T T H
8: T T T

Now I just count the number of outcomes for which there are two heads -- outcomes 2,3 and 5, so the odds are 3/8. Note, this is the odds of getting _exactly_ two heads. For the odds of getting _at least_ two heads, we have to add in outcome number one where we get three heads, for odds of 4/8 or 1/2.

Ok, now let's generalise this problem. What are the chances of getting _exactly_ _k_ heads out of _n_ coin tosses. For the three-toss two-head problem above I just had to count all the ways I could choose two slots to be heads out of three different positions. Now I want to choose _k_ slots out of _n_ different positions. This is sometimes expressed as "_n_ Choose _k_" and there is a well known formula for it in combinatorics:






The exclamation mark notation means "factorial" which in turn means "multiply all the numbers from _n_ down to 1", so for example 5! = 5 x 4 x 3 x 2 x 1. Let's see how it works out for our previous example of two heads out of three tosses, i.e. "3 choose 2":






That matches what we found -- there are three ways to choose two slots to be heads out of three coin tosses. But we're looking for odds, so what's the total number of ways that _n_ coin tosses can turn out? That's easy -- there are two possible outcomes each time (H or T) so for _n_ tosses it's:






So finally, the odds of _k_ heads out of _n_ coin tosses are:






Now let's generalise some more. When we wrote down all the possible heads (H) and tails (T) outcomes, we could have chosen any symbol for heads and tails. Let's do it again and choose 0 and 1:

1: 0 0 0 
2: 0 0 1
3: 0 1 0
4: 0 1 1
5: 1 0 0
6: 1 0 1
7: 1 1 0
8: 1 1 1

If you know what _binary numbers_ are, i.e. numbers in base 2, you can see that our coin toss problem is exactly the same as saying: "how many 3-digit base-2 numbers are there with exactly 2 zeros?", or more generally: "how many _n_-digit base-2 numbers are there with exactly _k_ zeros?". We could generalise even more by working in any base, _b_. How many _n_-digit base-_b_ numbers are there with exactly _k_ zeros?

It's quite easy to generalise our existing formula for this. First we have to realise that the total number of possible outcomes is now 
	

	
	
		
		

		
		
	


	




 instead of 
	

	
	
		
		

		
		
	


	




. There are also far more ways of getting our desired result. Previously, when we chose _k_ slots to be 0 (heads) all the other (
	

	
	
		
		

		
		
	


	




) slots _had_ to be 1 (tails). But now, when we have chosen _k_ slots to be zero, there are (
	

	
	
		
		

		
		
	


	




) ways for each of the other (
	

	
	
		
		

		
		
	


	




) slots to be non-zero. This is effectively a number in base (
	

	
	
		
		

		
		
	


	




) with (
	

	
	
		
		

		
		
	


	




) digits, so the number of different values is:






So finally, the number of _n_-digit base-_b_ numbers with exactly _k_ zeros is:





At this stage you may be wondering what all this has to do with Prize Bonds. Well, we've now got everything we need to answer our original question. We look at the number of prizes every year and notice that the number of €50 prizes so vastly outnumbers all the others, that as a first approximation we can ignore every other type of prize. The prize bond website tells you how to work out the number of €50 prizes ... it's about 470,000 in a year. Now, using my flawed logic, there are 470,000 draws each year. (In reality there are 52 draws with about 9,000 prizes in each draw but bear with me). Let's say you are entered in each of 470,000 draws. What are your chances of winning each draw? It is your amount invested divided by the total prize bond fund ... that's the fraction of the total prize bonds you hold. For example, you have €100k invested, the total fund is €2 bn, so you have a 1/20,000 chance in each draw. That means there's one chance you'll win it, and 19,999 chances someone else will win it.

Ok, so let's pretend each draw is one digit in a vast 470,000 digit number. There are 20,000 different way each draw could come out -- one of which represents a win for you, so let's say a win for you is the zero digit in a base 20,000 number. What are the odds of you winning, say, 23 times? This is a problem we know how to solve! It's the number of 470,000 digit numbers in base 20,000 with exactly 23 zeros! And that's what our formula gives us:






There's some crazy big  numbers to deal with there -- bigger than a spreadsheet like Excel can work with directly -- but it _is_ possible to get an answer, and in this case it works out to a little worse than 1/12 or 8.08%. That's the odds of winning _exactly_ 23 x €50 prizes with €100k invested. You can work out the odds for any other number of wins and investment amounts using the same formula, which is what I've done throughout this thread.

Now, the way we've modelled this approach, there is some tiny but non-zero chance that your bonds could win all 470,000 x €50 prizes. But we suspect that actually, each bond can only win once per week so we have to model it differently. I'm not sure exactly how, but I have a germ of an idea. But maybe someone out there knows an easy way? How's that for a challenge.


----------



## Silvera

dub_nerd said:


> Selling all your bonds and buying them back again wouldn't make them a larger amount.



Correct (and I wouldn't be re-purchasing the exact same bonds  )
What I obviously meant was purchasing a large 'block' of bonds.....as opposed to my current 'spread' of bonds.


----------



## dub_nerd

dub_nerd said:


> Selling all your bonds and buying them back again wouldn't make them a larger amount.





Silvera said:


> Correct (and I wouldn't be re-purchasing the exact same bonds  )
> What I obviously meant was purchasing a large 'block' of bonds.....as opposed to my current 'spread' of bonds.



You obviously didn't believe me when I responded to the same question by PM. 

You're suggesting that if you held tickets 84 and 86 in a raffle you could improve your odds by swapping them for tickets 87 and 88 because the latter is a 'block'. Ok, suppose the competition organisers agree that you can write any number you want on the back of your tickets as long as they're not taken already, and they'll do the same with the duplicate tickets in the drum that they will do the draw from. You write 87 and 88 on the back of your tickets and they do likewise with tickets 84 and 86 in the drum. You have the same physical tickets as before. Have your chances improved?

Or if you choose 1 and 2 on a dice, you're saying your numbers will come up more often on repeated rolls than the guy who chooses 3 and 5. What if I then took your dice and repainted the faces on it, so that what used to be 1 and 2 are now 3 and 5, and _vice versa_. Are you saying I have now changed the odds on different physical faces coming up, just by labelling them something different?

Or again, if an asteroid is about to crash into a town in Ireland and kill one of the inhabitants, it's more likely to happen in a town where everyone's social security numbers were issued from the same block? 

Why does that last example seem even sillier than the others? -- because the _selection criteria_ (being essentially random) have nothing to do with the _identities_ of the population being selected from. But actually, it's the same in all the examples. In all cases -- Prize Bonds included -- you should just think of the number designations as _labels_ on the physical objects. Changing the labels can't change the odds.

(If we were to get technical, we would say the _countable additivity property_ from Kolmogorov's third probability axiom guarantees that any same-sized subsets of events with equal probabilities sum to the same probability... but that's just a fancy way of saying any _n_ Prize Bonds has the same likelihood of coming up as any other _n_ Prize Bonds).


----------



## dub_nerd

I said I had a germ of an idea. As a first step in looking at the difference between your chances if your Prize Bonds are entered in a separate draw for every prize, vs. a single draw for _n_ prizes per month, I looked at the chances of winning _at least once_ in a month.

If each draw was independent, i.e. bonds are "replaced in the giant drum" after each draw, then the chance of _not_ winning each draw is the fraction of bonds not held by you, and the chance of _not winning any draw_ is simply that number raised to the power of the number of draws. To put some numbers on it, if you hold 1/20000 of all Prize Bonds (equivalent to €100k investment) and there are 9,000 x €50 prizes each month, then your chances of _not_ winning in a month are:






Now let's look at the chances if winning bonds are _not_ replaced. Here we have to look at the number of different ways in which we could draw a bond that isn't yours. Your €100k  investment represents 16,000 bonds out of a total of 320,000,000 issued. So the number of ways of choosing 9,000 winning bonds, none of which are yours, is:






And to get the chances of that happening, we divide by the total number of ways that 9,000 bonds could be drawn:











Hey presto! The odds work out the same to five decimal places under both scenarios (and I don't know how much of the differences beyond that are rounding errors in the calculations). These are the odds of you _not_ winning in a month, so your odds of winning _at least once_, are: (1 - 0.63762) = 0.36238. That is, you have a 36.238% chance of winning at least once in a given month.

Intuitively, the fact that the numbers are so close by either method of calculation (for one draw per month vs. 9,000 draws per month) is not very surprising for such huge numbers and such a relatively small fraction of total bonds held. It convinces me that my other calculations throughout this thread would be very little affected either. Unfortunately, I don't (yet) have the mathematical acumen to come up with an exact calculation to replace them. (The difficulty is combining the odds per month to come up with the odds of winning a given number of times per year). But I believe the bottom line is that all the odds stated so far are correct to a high degree of accuracy regardless of the method of conducting the draw.


----------



## Silvera

dub_nerd said:


> Caution is not what you want with prize bonds -- *paradoxically it makes good sense to buy €100,000 worth, but none at all to buy €100 worth*.



No offence regarding your advice to me via PM....it was/is most appreciated 

The reason I posed the question is due to the many comments here regarding larger investments giving 'better' returns ....e.g. your post above.


----------



## dub_nerd

No offence taken. But my first answer is the simplest and most correct -- changing your numbers isn't a larger investment. Somewhere along the way you conflated larger 'block' with larger investment. Sorry if I misled by saying it makes sense to buy €100k but not €100. The €100k could be made of a thousand separately purchased hundreds ... it's the total that counts. Intuitively -- and also as a matter of fact, according to Kolmogorov's third axiom -- each little piece of your purchase contributes additively to your overall chance of winning.


----------



## Silvera

dub_nerd said:


> No offence taken. But my first answer is the simplest and most correct -- changing your numbers isn't a larger investment. Somewhere along the way you conflated larger 'block' with larger investment. Sorry if I misled by saying it makes sense to buy €100k but not €100. The €100k could be made of a thousand separately purchased hundreds ... it's the total that counts. Intuitively -- and also as a matter of fact, according to Kolmogorov's third axiom -- each little piece of your purchase contributes additively to your overall chance of winning.



Ah, that does explain it better. Thanks!


----------



## Cowpat

Thanks for all the informative and interesting posts on Prize Bonds! 
When cashing in PBs is it better to send by registered post or to simply use the freepost option for value > €40K? (photocopies of all Prize Bonds will be kept).
According to An Post website "Additional insurance is available for items posted within the Republic of Ireland.  A charge of €4 is applicable for cover up to €1,500 and a charge of €5 for cover up to €2,000."   - doesn't seem worthwhile...


----------



## theresa1

Freepost is fine - no need to use registered post.


----------



## The Ghoul

Nothing for me on Friday from either of my batches.

As per CiaranT's post http://www.askaboutmoney.com/showthread.php?t=189473 the prize fund was cut this weekend from 1.6% to 1.25%. 

At the same time the number of 1000 euro prizes has increased from 5 to 10 per week and the 20k prize is now 50k - I think this makes the cut worse again as it is still unrealistic to expect to win a 1k prize or a 50k prize.


----------



## dub_nerd

The combination of the change to the prize fund percentage and the increase in the highest weekly prize, means that the number of €50 prizes weekly (the only ones you can reasonably expect to win) has dropped by over one third.

Here was the prize structure before the change on 05-Oct-2014



 Total PB held (Sep 2014) | €2.1 b
Prize % | 1.6%
Total prize fund |
* €33,600,000*
*Prizes*
 | 
6 x €1 m | €6,000,000
46 x €20,000 | €920,000
52 x 5 x €1 k | €260,000
52 x 250 x €100 | €1,300,000
Total | 
*€8,480,000*

 | 
Total amt. in €50 prizes¹          | 
*€25,120,000*

Num. €50 prizes | 502,400
Num. €50 prizes/week | 9,662 
Prize % €50 prizes only | 1.2%
Gross equivalent AER²          | 2.2%
From November 2014:



 Total PB held (Sep 2014) | €2.1 b
Prize % | 1.25%
Total prize fund |
* €26,250,000*
*Prizes*
 | 
6 x €1 m | €6,000,000
46 x €50,000 | €2,300,000
52 x 10 x €1 k | €520,000
52 x 250 x €100 | €1,300,000
Total | 
*€10,120,000*

 | 
Total amt. in €50 prizes¹          | 
*€16,130,000*

Num. €50 prizes | 322,600
Num. €50 prizes/week | 6,204
Prize % €50 prizes only | 0.77%
Gross equivalent AER²          | 1.4%
Since the grossed up equivalent AER of 1.4% on €50 prizes under the new regime is now less than short term deposit rates (e.g. 1.75% on Rabo 30-day notice account), my opinion is that Prize Bonds are no longer a sensible investment.

1. Expected return based on number of €50 prizes, calculated by subtracting other prizes from total prize fund.
2. Gross AER calculated on assumption of 41% tax + 4% PRSI


----------



## The Ghoul

Thanks dub_nerd I don't think you factored in the increase in the number of 1000 euro prizes from 5 to 10 each week. That would knock another 260,000 from the "50 euro prize fund". By my calcs that means 100 fewer 50 euro prizes per week.


----------



## dub_nerd

Good spot, Ghoul. I updated the numbers in my previous post, and it's 100 fewer €50s/week as you say. The grossed up AER still rounds to 1.4%.

I never did get around to buying a large chunk of PBs, and won't be considering it now. What are your plans for your own two tranches? Your returns exceeded expectations for last year, but an average return would now be pretty lacklustre.


----------



## The Ghoul

dub_nerd said:


> Good spot, Ghoul. I updated the numbers in my previous post, and it's 100 fewer €50s/week as you say. The grossed up AER still rounds to 1.4%.
> 
> I never did get around to buying a large chunk of PBs, and won't be considering it now. What are your plans for your own two tranches? Your returns exceeded expectations for last year, but an average return would now be pretty lacklustre.


Thanks for the clarification, dub_nerd. I have some thinking to do about my PBs, the 75k tranche is only recently purchased and  has to stay in for another couple of months in any case. It is going to be used for a tax return in Oct 15 and I won't be investing it in risk assets. 

I also have a good amount in savings certs and bonds (issues 17 and 12 ) and in various issues of the 10 year solidarity bond, recently putting 150k into the latter (issue 4). 

If I didn't have anything in other state savings products I might avoid PBs now - however I see PBs as a variable rate, 7 day notice account and I like to have a good spread of maturity dates so I might keep the PBs and (hopefully) continue to experience the Friday feeling!


----------



## Cowpat

Thanks theresa1 for recommending the freepost option  I'm about to apply for repayment of >€40K of prize bonds but the form that I downloaded f only asks for my bank account sort code and account number. Is this sufficient for electronic transfer or will I need to include BIC and IBAN details? (SEPA requirement?). 
Thanks in advance.


----------



## theresa1

Your bank account sort code and account number should be fine. They can easily calculate the rest info if needed.


----------



## Cowpat

Thanks again for replying theresa1. So it looks like someone who is setting up a direct debit requires more stringent rules than someone who is looking to get their hard-earned cash invested returned?


----------



## The Ghoul

50 from 100k batch
50 from 75k batch

Pleased with that


----------



## postman pat

€50 today... so happy enough


----------



## The Ghoul

50 from the 100k batch


----------



## niceoneted

50 for me too!! Ist win since April. Total of 250 for the year so far.


----------



## SparkRite

€50 for me too.


----------



## postman pat

nil today...


----------



## inflation

Hi all - had my first win today of a massive 50 euro. On website it says I have to write to them at the address below, enclosing my bond certificate;

The Prize Bond Company Ltd.
FEXCO Centre
Killorglin
Co. Kerry

Is this the way everyone claims their €50 prizes?


----------



## postman pat

No Inflation, You should receive your cheque Tuesday or Wednesday If you have opted for the cheque option,but i agree its a bit misleading on the website about claiming a prize etc.


----------



## inflation

Thanks Postman - shouldn't really have won - only have €150 invested - guess I beat the odds.


----------



## postman pat

inflation said:


> Thanks Postman - shouldn't really have won - only have €150 invested - guess I beat the odds.



That certainly does beat the odds!...maybe you should do the lotto this week also...


----------



## The Ghoul

50 from the 100k batch
50 from the 75k batch

Good 

Over a very short period of 7 draws the 75k batch has won 100 euros which I calculate as a net AER of 0.99%. That will likely reduce now when the cuts to the prize fund take effect in November.


----------



## postman pat

zero today...by the way how do i put a sad smiley face on here...


----------



## SparkRite

postman pat said:


> zero today...by the way how do i put a sad smiley face on here...



Ifs its not in a menu then........,colon minus open bracket, as in :-(

€50 for me yesterday.


----------



## postman pat

... nothing today either..


----------



## SparkRite

2 X €50 today..................Way Hey


----------



## The Ghoul

50 from the big batch 
0 from the small batch


----------



## Palerider

The Ghoul said:


> 50 from the big batch
> 0 from the small batch



You'd think The Ghoul would be out scaring people on this scary of all days, today mus be the highlight of his year...

2 by €50 last week
1 by €50 this week.

Has been falling off for me but still ahead of deposit rates so happy...;-)


----------



## The Ghoul

Same result today as last week.
50 from big batch
0 from small. 

Today was the first draw to which the new prize fund rules apply (50k top prize, 10 x 1k prizes but a big reduction in the number of 50 euro prizes)


----------



## postman pat

The Ghoul said:


> Same result today as last week.
> 50 from big batch
> 0 from small.
> 
> Today was the first draw to which the new prize fund rules apply (50k top prize, 10 x 1k prizes but a big reduction in the number of 50 euro prizes)



Sounds like bad news,prizebonds seem to be losing there shine a little..nothinh today for me anyhow, by the way is the 1 million prize gone?


----------



## niceoneted

Nothing today for us. Is there a link to the new allocation of prizes. I think I'll use the money and change the car!!


----------



## SparkRite

Same as last week, 2x50 , so can't complain.


----------



## The Ghoul

1 x 50 from 100k batch. The prizebonds website and bond tracker have changed this week - the format is a bit different and the list of prizes now only goes back as far as March for me (the below screenshot includes prizes since March from my 100k batch and 75k batch but not the 33k batch that I cashed in a while ago) 

Edit: there seems to be some new functionality for filtering prizes by date if one clicks on the "Winners" link


----------



## xocal

*Prize Bond results*

I hold approx 100 bonds for the guts of 20 years! and have won 1 prize and the princely sum of €70.00. I have not checked for winners online, as I have not changed address, and we are assured that winners will be written to!!
So, how many Bonds would I need to hold to be assured of an income from them, which would beat alternative deposit rates??


----------



## Squonk

xocal said:


> I hold approx 100 bonds for the guts of 20 years! and have won 1 prize and the princely sum of €70.00. I have not checked for winners online, as I have not changed address, and we are assured that winners will be written to!!
> So, how many Bonds would I need to hold to be assured of an income from them, which would beat alternative deposit rates??


 That question has been answered to death way back in one of the 17 pages of this tread


----------



## SparkRite

Squonk said:


> That question has been answered to death way back in one of the 17 pages of this tread



I was just about to say that, ie: Read the (expletive)  thread.


Hard to believe that someone would post such a question when people have gone to such lengths in this thread???


----------



## postman pat

um anyway I got €50 this week..btw had to change username password etc on the new look prizebond site,


----------



## boardnashea

The new prizes are as follows..
"On 5th October 2014 the National Treasury Management Agency announced a reduction in all State Savings interest rates. The Prize Bond fund rate is now 1.25% - this is the variable rate that will be used to calculate the November 2014 Prize Fund and will continue until further notice.

There will continue to be a €1 Million prize in the last weekly draw of each second month, February, April, June, August, October, and December.

€50,000 awarded each week, other than when the €1 Million prize is awarded.
10 €1,000 prizes.
250 €100 prizes.
Over 6,000 €50 prizes."

so, yes, the €million is still there for the taking.


----------



## monagt

> Prize Bonds are looking attractive alternatives to deposits



Should this header now be changed?


----------



## The Ghoul

50 from the 75k batch 
0 from the 100k batch


----------



## The Ghoul

50 from the 100k batch 
0 from the 75k batch 

This thread has gotten quiet, have people stopped winning or just lost interest in posting.


----------



## SparkRite

The Ghoul said:


> 50 from the 100k batch
> 0 from the 75k batch
> 
> This thread has gotten quiet, have people stopped winning or just lost interest in posting.




Basically lost interest in seeing "Sorry, you have no new winners." 

Nowt again this week. :-(


----------



## postman pat

nothing today either....its becoming a habit now...im thinking of cashing in in the new year


----------



## niceoneted

Nothing again for us this week. Purchased another 10k yesterday bring it up to 30K. I went back through my winnings and it turns out I had 4 X 50 euro wins from the same batch of 2,500 euro that I bought in 2010. All won in the last 18 months.


----------



## TomOC

So, I had 19000 in for the past 13 months.  I won 4, 50 Euro's, nothing since July (3 of the 4  wins came in a total of 5 weeks).  I will probably take the money out now as rates dropped again in October (maybe nothing really worth changing to though as all rates are so bad).  I got 200 Euro for 13 months; at a 1.95% rate I would have got about 270 after tax on deposit.


----------



## The Ghoul

50 euros from the 75k batch last Friday, nothing from the 100k batch.

For the 75k batch I've won 200 euro in 14 draws = 0.99% AER net. Pretty bad - but the best 3 month fixed term deposit rate in the Best Buys thread is only 1.3% gross.

The best variable rate deposit in the Best Buys is 1.75% gross but it's a 30 day notice account. There are some instant access accounts that pay 1.50% gross.

I'm going to continue with the prize bonds for the moment and regard them as a 7 day notice account. 

Some of my 3 year savings bonds have matured recently and that money is being reinvested in the 10 year National Solidarity Bond (2.26% AER net if left for 10 years)


----------



## TomOC

TomOC said:


> So, I had 19000 in for the past 13 months.  I won 4, 50 Euro's, nothing since July (3 of the 4  wins came in a total of 5 weeks).  I will probably take the money out now as rates dropped again in October (maybe nothing really worth changing to though as all rates are so bad).  I got 200 Euro for 13 months; at a 1.95% rate I would have got about 270 after tax on deposit.



Another 50 last Friday.  After 13 months I made about 1.2% AER.  I would have needed to get about 1.8% to match it on an account where I paid DIRT.


----------



## postman pat

nothing today either....


----------



## The Ghoul

1 x 50 euro from my 75k batch in the draw of the 23rd December (no draw on 26th due to public holiday)

Nothing in the draw of the 2nd January 2015.


----------



## postman pat

€50 today.....


----------



## zen

I heard a quote on famil guy that "the lotto is a tax on stupid people", it made laugh.  Is it the same for prizebonds?......


----------



## zen

I think the small prizes are desinged to keep people hooked, I won 75 a couple of time with 7k invested many moons ago.

Ooo if I won 75eur maybe i'm lucky!  LOL, the amount of forms I had to fill out to declare my huge 75eur, just enough to buy a pair of jeans.
 I dont think they are a good place to put your money. Security is the reason why people are putting the money there and not really to win the jackpot since its guaranteed by the government.....e'hem......


----------



## SparkRite

Yet again nothing today. 

Zilch since the 7th Nov. '14.


----------



## Lightning

Interesting comments by Marc Westlake regarding Prize Bonds.

"More chance of getting struck by lightning". http://m.independent.ie/business/pe...ning-strike-than-prize-bond-win-30262516.html


----------



## postman pat

nil


----------



## SparkRite

Same as PP above..NIL.


----------



## postman pat

has anyone got a plan?


----------



## dub_nerd

Since changes to the prize structure late last year, Prize Bonds don't make sense as an investment compared to higher yielding deposit accounts.


----------



## theresa1

Purchased €800 on 30 Sep 2014 and another €200 on 31 Oct 2014 just to make it an even €1000. I won €50 on Friday's draw - pleasantly surprised from the €800 batch.


----------



## postman pat

thats quite a good result..


----------



## inflation

Perhaps the thread title needs to be changed to 

Prize Bonds are looking unattractive alternatives to deposits


----------



## postman pat

maybe ...


----------



## The Ghoul

Just an update on how my PBs have been doing. I've only won once in 2015 so far. In the 20 draws since the 12th September which was my first draw with my current batches:

100k batch - 11 x 50 euro prizes = 1.43%
75k batch - 5 x 50 euro prizes = 0.87%

Not TOO bad considering that in the Best Buys thread the highest 3 month or 6 month term deposit currently available is Ulster Bank's 6 month account paying 1.45% gross.

Should be said that the best 6 month rate from a bank would have been higher back on 12th September and would have beaten a 0.87% net return but not a 1.43% net return.

Also the PB "interest" rate has been cut since the 12th September so my return in the next 20 draws should be lower than I got from the previous 20.


----------



## postman pat

not a bean today either...


----------



## The Ghoul

Good day today
100k batch - 2 x 50 euro
75k batch - 1 x 50 euro


----------



## SparkRite

Broke my bad luck run, €50 today.


----------



## postman pat

nil today sadly...


----------



## DirectDevil

Won about €2,000 over the course of 2014. A decent return of lots of €50s.
Have not won a rasher since middle December 2014 !! Curious. 
Out of curiosity did the changes to Prize Bonds cause people to cash in their bonds and do something else ?


----------



## postman pat

Nothing again today...Things seem really to have taking a turn for the worse.


----------



## dub_nerd

accidental double post


----------



## dub_nerd

postman pat said:


> Nothing again today...Things seem really to have taking a turn for the worse.


It's always possible you're just having a bad run. But I think, based on your early postings and reported win rate, that your prize bond holding is high enough to even out a lot of the bumps and give you a return close to the average. The unfortunate truth is that the average you can expect has dropped from 1.2% to 0.8% in the last 18 months. Just as your large holding protects you from erratic under-performance compared to the average, it also makes you less likely to substantially beat the current poor odds. It really doesn't make sense any more to be holding prize bonds versus the 1.5% (before tax) return you could be getting on, say, a 30 day notice account. Not allowing for the gambling urge, of course.


----------



## SparkRite

Nowt today either.


----------



## Squonk

I haven't won since October when it seemed I was winning something every week before that. Did someone speculate in this thread that new subscribers won more often than long term subscribers? Sounded like a conspiracy theory to me at the time but .........


----------



## PMU

Squonk said:


> I haven't won since October when it seemed I was winning something every week before that. Did someone speculate in this thread that new subscribers won more often than long term subscribers? Sounded like a conspiracy theory to me at the time but .........


  I wasn't the one who speculated,but a new issue bond is more likely to be a winner than and old issue bond as most old issue bonds have been cashed, so there are more new issue bonds than old issue bonds in the draw.


----------



## SparkRite

PMU said:


> I wasn't the one who speculated,but a new issue bond is more likely to be a winner than and old issue bond as most old issue bonds have been cashed, so there are more new issue bonds than old issue bonds in the draw.



But I don't think that that is what Squonk is saying. If I understand correctly Squank is speculating that when you initially purchase your bonds they seem to be winners more often than when the age, even only by a few months.
In other words if I had bought a bond 50 years ago and one yesterday both should have the same odds of being a winner, but that does not appear to be the case. 

And yes this was mentioned earlier in this thread and like Squonk I also dismissed it as rubbish, but not so sure now.........Hmmmmmm .

I know that reducing the prize fund by 25% has had a big impact on this though, but nevertheless.............Hmmmmmmm.


----------



## postman pat

dub_nerd said:


> It's always possible you're just having a bad run. But I think, based on your early postings and reported win rate, that your prize bond holding is high enough to even out a lot of the bumps and give you a return close to the average. The unfortunate truth is that the average you can expect has dropped from 1.2% to 0.8% in the last 18 months. Just as your large holding protects you from erratic under-performance compared to the average, it also makes you less likely to substantially beat the current poor odds. It really doesn't make sense any more to be holding prize bonds versus the 1.5% (before tax) return you could be getting on, say, a 30 day notice account. Not allowing for the gambling urge, of course.



True Dub_nerd,i rang prize bond company today to find out about selling my bonds,just got talking to the lady on the phone and I told her about my lack of winning lately etc,she replied they were getting a lot of calls about this of late,so we are not the only people noticing this.
Anyway i have decided to the sell,it takes about 5 to 10 days to receive your cheque.


----------



## Grizzly

I have two lots of circa €50k. When I first purchased the first lot I had a number of small wins. So far not enough to justify having them and on their anniversary I will cash them in.
I then purchased a second lot of €50k. The exact same thing happened. A run of €50 prizes and now nothing. I don't understand why the newer lot are winning but the older lot are not? I will also cash these in on their anniversary also.
I also have about €3k going back to the 1970's.......I never win anything on these. These are definitely going to be cashed in also.


----------



## postman pat

Yes i think some eager journalist could look into prizebonds and how they pay out etc,I cant help think how the Irish Sweepstakes operated and what we found out after!


----------



## dub_nerd

Grizzly said:


> I have two lots of circa €50k. When I first purchased the first lot I had a number of small wins. So far not enough to justify having them and on their anniversary I will cash them in.
> I then purchased a second lot of €50k. The exact same thing happened. A run of €50 prizes and now nothing. I don't understand why the newer lot are winning but the older lot are not? I will also cash these in on their anniversary also.
> I also have about €3k going back to the 1970's.......I never win anything on these. These are definitely going to be cashed in also.



Have you kept a thorough record of what you've won, like The Ghoul on this thread? I'd be happy to have a look over it and calculate whether you've had a suspicious run of bad luck. It's a relatively easy thing to calculate an average return, but calculating whether a particular winning or losing streak is out of the ordinary is much more difficult. With prize bonds, smaller amounts are more "idiosyncratic" in their behaviour. Your €3k, at current pay out rates should win on average once every two years. But several years, even a decade, without a win would not be enormously unlikely (which is why small amounts of PBs are a bad investment). Have you really gone forty years or so without a single win? That _would_ be fairly remarkable. However, my current pet theory is that people don't keep a detailed record and only imagine a skewed distribution of wins. It's like your memory of a sunny summer has more to do with how often you went out to look at the sky than the actual sunshine record.


----------



## postman pat

Hi Dub_nerd,
                   Just in regard to your theory that people dont keep records of their wins,in my case I log on to the prizebond website to check my numbers and there is a record of my wins and dates of wins ,and also can see when I last won etc. and the distances between wins of late is ever increasing as far as I can see.

 all the best  Pat


----------



## dub_nerd

postman pat said:


> Hi Dub_nerd,
> Just in regard to your theory that people dont keep records of their wins,in my case I log on to the prizebond website to check my numbers and there is a record of my wins and dates of wins ,and also can see when I last won etc. and the distances between wins of late is ever increasing as far as I can see.
> 
> all the best  Pat


I didn't really mean _you_ ... I know you were going toe to toe with The Ghoul to record your wins, which has been an interesting and useful experiment. I suppose the decreasing frequency of wins is what we'd expect to see, with the changes that have been implemented to the prize structure over the last 18 months. At this stage I would expect a €100k holding to win a €50 prize less than once every three weeks. Of course, that is only since the relatively recent changes took effect in November 2014, so it's unlikely you'll see that exact trend, but there's a reasonable chance of it averaging out in the year to next November.


----------



## Squonk

I lodged €50k back in April. Was going very well until November. See below:


----------



## dub_nerd

Squonk said:


> I lodged €50k back in April. Was going very well until November. See below...


Probability is a strange thing. Although you are likely to see things averaging out in the long run, it would be extraordinary if you didn't see any fluctuations in the results -- in fact _that_ would be the most surprising thing in any run of luck, good, bad, or otherwise.

So the first thing I would say about the above is that we can ignore the €1,000 win as a complete and utter fluke. For your level of investment at current odds you would expect to win a €1,000 prize every eighty years on average. You will quite likely never see another (although having won one already doesn't make you any less likely to win another in future draws -- that's a common misconception that people have).

The next observation is that even ignoring the €1,000, you were way ahead of the odds for May to October. Assuming you bought at end of April and were eligible to win from start of May, you were running at an annualised return of 2%. The average (before the November changes) was around 1.1% if memory serves me right. You got almost your entire annual average in just six months. So perhaps a more pertinent question is why you were doing so well until November, rather than why you have done so badly since! (although the answer either way is: random chance).

If your figures are up to date, then I think you are saying you haven't had a win for about 14 weeks on the trot. That's bad luck, but it's far from _extraordinarily_ bad luck. Since the November changes, your €50k stands to win a €50 prize on average once every seven weeks. You've gone a little over twice that without a win. Here's a chart of the odds (specific to your €50k investment) of you winning each possible number of €50 prizes from 0-20 in the year starting November last:






Here's the data:


*0** 1 ** 2 ** 3 ** 4 ** 5 ** 6 * * 7 ** 8 ** 9 *0.0461%0.3545%1.3614%3.4857%6.6934%10.2825%13.1633%14.4439%13.8679%11.8354%


*10 ** 11 ** 12 ** 13 ** 14 ** 15 ** 16 ** 17 ** 18 ** 19 ** 20 *9.0907%6.3477%4.0630%2.4005%1.3170%0.6744%0.3237%0.1463%0.0624%0.0252%0.0097%


If you were to only win once every 13 weeks, you'd win 4 prizes in a year. To get the odds of winning that number or less, sum all the bars from 0-4. You get 11.94%. That means you have a nearly one in eight chance of winning four or less times. If it happened I'd say it was bad luck -- you have a better than 7/8 chance of doing better -- but I wouldn't say it was outlandish. And it would mean most of your year would look pretty much as barren as the period since last November.

With this sort of draw, the odds are less "lumpy" the more you invest. The odds of getting near the average return are much better for €100k than €50k even though, counter-intuitively, the average percentage return is _the same_ for both amounts. In statistical terms, the distribution in the chart above has a higher standard deviation from the mean than the equivalent chart for a €100k investment.


----------



## The Ghoul

Here are my wins since the 12th September - I picked that date as it was the first draw with my newly purchased batch of 75k. Also, this screenshot shows what happened from the 7th November on which was when the  prize fund was reduced. Obviously this is a short time period so I wouldn't read too much into it.

Edit: the below table may be confusing - the "invested" column is my way of tracking which batch of bonds that the win came from. My total investment is 175k.


----------



## postman pat

Squonk said:


> I lodged €50k back in April. Was going very well until November. See below:


Hi Squank,
              That €1000 looks good though!


----------



## dub_nerd

The Ghoul said:


> Here are my wins since the 12th September - I picked that date as it was the first draw with my newly purchased batch of 75k. Also, this screenshot shows what happened from the 7th November on which was when the  prize fund was reduced. Obviously this is a short time period so I wouldn't read too much into it.



Off the top of my head, on €175k you'd be looking at averaging forty-two or so €50's a year up to November and twenty-eight or so after. So the nine wins in two months to start of November, and ten in three months since, both look slightly ahead of the odds.


----------



## postman pat

Nothing on the 13th Fed either, I have posted off my instructions to cash all my bonds in, I phoned prizebond company last week  as i had a few questions about the prizes etc,the woman on the phone said they were getting alot of calls/complaints about the prizes of late.
Anyway best of luck to all that are holding on to theirs,it was a really interesting experiment.

Pat


----------



## dub_nerd

Interesting to note that the latest Prizebonds FAQ (from late last year) on their website shows the total amount invested is up a couple of hundred million even since this thread started, and I believe it was up several hundred million in recent years leading up to that. I wonder will we start to see it drop again as the shine goes off them for bigger investors like PP and others above. Or is the majority of the investment in small increments from people who more or less forget about them? My gut (and PP's anecdote above) tells me that there could be a considerable reversal.


----------



## The Ghoul

Like postman_pat I'm considering my options - from a quick calculation my "rate" on the PBs is currently running at 0.65% while I'd get 0.885% net from an instant access bank account. On 175k that's a difference of over 300 euros in a year.

I have to avoid getting into a thought process where I accept a lower PB rate because I'm hoping for "Big Wins" 

However I do generally favour State Savings over the banks, I find the banks to be a pain in the This post will be deleted if not edited to remove bad language to deal with.

I already have a lot in the 10 year Solidarity Bond, mostly issues 3 and 4. Also have savings certs (issue 17  ) and savings bonds issue 12. The savings bonds are now maturing and I'm putting that money into 10 year SBs. If I didn't have the above I probably would have cashed in the PBs for some other state savings product by now.


----------



## postman pat

anyway received my cheque yesterday. took less the 5 days.... will keep a look at thread as a hurler on the ditch from now on!


----------



## postman pat

is this thread after dying??


----------



## SparkRite

postman pat said:


> is this thread after dying??



I think so, yes, just like the prizefund. :-(


----------



## Jacky Mack

SparkRite said:


> I think so, yes, just like the prizefund. :-(


There are some wonderful contributions here from really knowledgeable investors.
It's very useful and comforting too to be able to drop in and read through and thereby acquire a good insight into
all or most of what holding PBs entails.  I find it commendable and sincerely hope it continues.
Thanks contributors.....all !


----------



## The Ghoul

Wins have dried up for me hence the lack of posts - no wins since the 13th February. I calculate my return to be 0.86% since the reduction in the prizefund in Nov 2014 (175,000 invested, 19 draws from November to date, 550 euro won)


----------



## Jacky Mack

The Ghoul......that's food for thought alright and makes me very reluctant to increase my stake.  In fact, don't think I'll go there.


----------



## postman pat

yes indeed... i wonder if interest rates start to rise (sometime),will the prizes be increased as well?


----------



## The Ghoul

Oh yes  My 2nd biggest win in one draw, 4 x 50. All from my 100k tranche of bonds.


----------



## postman pat

Well done ghoul... i wonder did the people from the prizebonds see our recent posts!


----------



## SparkRite

Nice one Ghoul, zilch today for me, not surprising seeing as how you whipped 4 of the prizes.


----------



## dub_nerd

Outrageously jammy, Ghoul. You sure you're not a shill from the Prize Bond company here to convince us to invest?


----------



## The Ghoul

Yeah it was a nice result today. I haven't tried to work it out but I'd say the probability of winning 4 x 50 in one draw with the current prize fund (even with the relatively large amount I have invested) is quite low.

Also, I go several weeks winning nothing, post on this website about cashing my PBs in, then win 4 x 50 with all of the wins coming from a batch of 100k and no wins from my batch of 75k. There are probably some interesting statistics, logical fallacies or conspiracy theories that could be discussed here!


----------



## Jacky Mack

.....wonder if that indicates that the more recent bond purchases really do have a better chance of winning ?


----------



## postman pat

Jacky Mack said:


> .....wonder if that indicates that the more recent bond purchases really do have a better chance of winning ?



Dont start!!!!


----------



## The Ghoul

Nice one, 2 x 50 today (both from 100k batch) after 4 x 50 last week.


----------



## postman pat

great Ghoul....you are going through a kind of purple patch there...


----------



## SparkRite

2 X €50 for me also.


----------



## usual

Nothing for me again today,,,Really disheartened the last few months...Had plans to cash in but fell through and now I will have no choice but to look for better return for my money. Since prize funds dropped the return is dismal...Same amount invested as the ghoul all in one batch but its been a month since a win and only the odd 50 now... Glad some of you are faring out a bit better...


----------



## happypat

At the rate (pun) rates are dropping on deposits, any return at all from Prize Bonds will make them a winner (pun) in the future no?  After all, there's only so low the prizes can go before they won't get away with calling them prize bonds.


----------



## Jacky Mack

happypat said:


> At the rate (pun) rates are dropping on deposits, any return at all from Prize Bonds will make them a winner (pun) in the future no?  After all, there's only so low the prizes can go before they won't get away with calling them prize bonds.



Yea....I agree no win since last year on E25K so I've stopped buying anymore and I'm taking out what I have for some half decent return elsewhere.  At this stage it's a no brainer.


----------



## postman pat

Yes i think prizebonds are a no no for the moment.....If you shop around 1 to 2% is possible from some banks.

Pat


----------



## The Ghoul

50 euros today - 100k tranche.


----------



## usual

Nothing again,,,,As usual....Was hoping they would read my post last week and would deliver today,,,,that plan did not work..


----------



## postman pat

what a tail of woe that are prizebonds.......


----------



## The Ghoul

1 x 50 euro today from my batch of 75k


----------



## postman pat

congrats Ghoul.... are you happy enough with the returns at the moment?


----------



## The Ghoul

I'm quite happy at the moment, postman. Since the reduction in the prize fund in November 2014 I've won 950 euros in 24 draws on 175k - I make that as a return of 1.18%. The best instant access or 7 day notice in the best buys at the moment seems to be 1.5% which is obviously a gross rate.


----------



## usual

Nothing today,,,50 last week.. 6 months return since prize fund reduced 0.7%...I know rates are bad in general but there must be a better return available out there...
Well done to million winner today,,,, Nice return on a bond purchased in Feb...


----------



## The Ghoul

50 today from the 75k batch


----------



## postman pat

The Ghoul said:


> 50 today from the 75k batch


every little helps Ghoul...as in the Tesco ad!


----------



## The Ghoul

A pretty rare 100 euro prize today  From my 100k batch.


----------



## usual

well..at long last,,50 euro today,,,,so at least my bonds are in there,,Was beginning to think they had evaporated.
Well done The Ghoul..Hope your run continues and youre prizes are going in right direction.....up..


----------



## The Ghoul

First win since the 8th May - 1 x 50 from my 75k batch


----------



## The Ghoul

50 today from the 100k tranche  - first win since the 29th of May.


----------



## SparkRite

Zilch since the 10th April. 

Really gone to the dogs now. 
Time to look at shifting funds methinks.


----------



## postman pat

SparkRite said:


> Zilch since the 10th April.
> 
> Really gone to the dogs now.
> Time to look at shifting funds methinks.


yep ,I think the golden goose is now dead


----------



## errigal

Hi all
I'm about to cash mine in... I'm not normally one for conspiracy theories but I do believe there is something not right with the allocation of prizes.

I bought a sizeable number of these last July (2014) and since then had the following wins
July 2014 - 2 x 50
Aug 2014 - 1 x 50
Sept 2014 - 2 x 50
Oct 2014 - 1 x 50
Nov 2014 - NONE
Dec 2014 - NONE
Jan 2015 - 1 x 50
Feb 2015 - NONE
Mar 2015 - NONE
Apr 2015 - NONE
May 2015 - NONE
June 2015 - NONE

There was a 21% drop in the interest rate the prize bonds were publishing in Nov 2014, which would contribute of course, but the drop off is stark.

Have others seen similar patterns that seem strange.?


----------



## postman pat

yep I think its time to cash in alright,maybe in the future when the wider interest rates etc become stable prizebonds might be worth a punt again,its a shame really and the prizebonds company dont seem to worry that alot of money is leaving them.


Pat


----------



## SparkRite

errigal said:


> Hi all
> I'm about to cash mine in... I'm not normally one for conspiracy theories but I do believe there is something not right with the allocation of prizes.
> 
> I bought a sizeable number of these last July (2014) and since then had the following wins
> July 2014 - 2 x 50
> Aug 2014 - 1 x 50
> Sept 2014 - 2 x 50
> Oct 2014 - 1 x 50
> Nov 2014 - NONE
> Dec 2014 - NONE
> Jan 2015 - 1 x 50
> Feb 2015 - NONE
> Mar 2015 - NONE
> Apr 2015 - NONE
> May 2015 - NONE
> June 2015 - NONE
> 
> There was a 21% drop in the interest rate the prize bonds were publishing in Nov 2014, which would contribute of course, but the drop off is stark.
> 
> Have others seen similar patterns that seem strange.?




Couldn't agree more, my bonds have followed a VERY similar pattern.

Cashed in some a few months back and hey presto, some wins for a few weeks.
Seems like they need a nudge now and then like, "Hello I'm still here". 

And like you, neither am I one for conspiracy theories.


----------



## errigal

Maybe I should just sell 1 prize bond first and see if I start to win again... then when it dries up sell another one... 

Definitely smell a rat...


----------



## The Ghoul

50 again today - 100k batch.


----------



## errigal

The Ghoul said:


> 50 again today - 100k batch.


As a matter of interest TG, how many 50 wins have you had from the 100k batch since 1/1/15?


----------



## The Ghoul

Here's what I've won on each batch since the 1st January. 100k batch doing a lot better than the 75k


----------



## errigal

I'm definitely getting shafted - they are getting cashed in next week. I might consider buying again just to see what happens for a month or two.


----------



## The Ghoul

50 today from 100k batch.

On the topic of conspiracy theories and newly purchased bonds, I have my batch of 100k about 1 year longer than I have my batch of 75k and there isn't a massive difference between the size of the two batches - yet the 100k batch is doing a lot better!


----------



## dub_nerd

errigal said:


> I'm definitely getting shafted - they are getting cashed in next week. I might consider buying again just to see what happens for a month or two.


Do you mind me asking what size your batch is? Just interested in the return rate you were seeing last year and the odds against your bad run this year. You may not want to answer of course.


----------



## DirectDevil

What is the maximum number of wins that you have scored on the weekly draw ?

I had few hat tricks over the last few years i.e. 3 x €50. Even though I have a reasonably large holding of bonds at the moment I never break 3 wins in a week.


----------



## The Ghoul

50 today from 100k batch. First win for 4 weeks - not good.


----------



## postman pat

are you considering your options Ghoul?


----------



## The Ghoul

Hello postman, I'll be cashing in my 75k batch in a couple of months  as it will be used for a tax return - however I think I'll leave the 100k in PBs for the time being. I like having money split between short, medium and long term accounts and regard PBs as a 7 day notice account. The return is still acceptable to me compared to instant access/short notice bank accounts. .

I already have a fair amount in long term state saving products eg  ~300k in issue 4 and 5 of the 10 year bond.

If I was starting from zero and got a windfall of 100k, I think I would put it in medium or long term products before PBs.


----------



## postman pat

Yes true i think,prizebonds at this moment seem not great value,but if and when interest rates begin to rise they will become a good option again, anyway all the best with your decision.


Pat


----------



## The Ghoul

50 yesterday from 75k tranche.


----------



## The Ghoul

50 today from 100k batch


----------



## The Ghoul

The Ghoul said:


> 50 today from 100k batch


Same again this week.


----------



## SparkRite

First 50 in 6 weeks or so........Whoopeeeee!


----------



## postman pat

congrats.....


----------



## Eddie Peters

Congrats to The Ghoul, postman pat, SparkRite etc for midday Friday entertainment. Many thanks to Dub_Nerd for the interesting (and often mind-boggling) stats. Very interesting stuff. Just wondering, if ye had €100K now what would you do? Prize bonds were great for that safe crunchy Friday feeling but I reckon it's probably too small a sum to get any decent rewards. State Savings - 3, 4 or 5 years - are probably the next safest options. I'm not really interested in topping up pension pot - or losing more shirts on shares. After that, I'm kinda confused. Is property investment in 2015 as bad as other posters claim?


----------



## dub_nerd

Hi Eddie, I still reckon Prize Bonds are not a worthwhile investment. The only thing that has changed is that the total value of prize bonds outstanding has increased somewhat, which is good news because it increases the number of €50 prizes. This means a bigger proportion of the payout is in denominations that you actually stand a chance of winning.

To recap with the latest figures: the current Prize Bond FAQ says that there is a total of €2.3 bn invested as of June 2015. If you total up the fixed prize structure, and subtract that amount from 1.25% of the total invested (which is the current stated payout), you get the amount paid out in €50 prizes. For a €100k investment in a reasonable time horizon you can expect to win an  average number of €50 and €100 prizes. The prizes of denominations greater than this represent 0.37% of the total payout, so your average return is 1.25% - 0.37% = 0.87%.

The return is tax free, so it grosses up to an equivalent of 1.47% in an account on which you pay 41% DIRT. If you are a chargeable person liable for 4% PRSI on unearned income, the gross taxed equivalent is slightly higher at 1.58%. The amounts are about the same as a Rabo 90-day notice account at 1.45%, but the Rabo option is guaranteed whereas the Prize Bond return may be higher or lower than expectations in the short run.


----------



## The Ghoul

Nothing in September on a holding of 175k!


----------



## SparkRite

The same for me "The Ghoul", NOWT in Sept.. 
Albeit with slightly less capital than yourself.
Its a farce. :-(


----------



## postman pat

SparkRite said:


> The same for me "The Ghoul", NOWT in Sept..
> Albeit with slightly less capital than yourself.
> Its a farce. :-(


at least a farce would be a bit funny....


----------



## The Ghoul

I have cashed in my 75k batch as it is tax return season. I used the EFT option for encashment and the funds were showing in my account 4 working days after posting the form

Returns on this batch were pretty disappointing but that is to be expected.

75,000 euro
55 draws
11 x 50 euro prizes
I make that as a 0.7% return

Nothing today from my 100k batch either


----------



## dub_nerd

Ghoul that is very close to the expected average of 0.81%. Including €100 prizes, the expected average is 0.87% but it takes a fair while for those to average out, and even with a €100k investment you have a nearly 60% chance of winning zero of them in a single year.

So -- fairly niggardly returns, but about what you would expect under the current prize structure. Thanks for keeping us updated over the past year and more.


----------



## The Ghoul

Thanks dub_nerd - for comparison my 100k batch has done better over the same period

100,000 euro
55 draws
26 x 50 euro prizes
1 x 100 euro prize
Return of 1.3%


----------



## The Ghoul

1 x 50 today
2 x 50 last week

Something funny happened last week though - as usual I checked the website at 12:30 on Friday  16th and results for the draw were up but I got the  "sorry you have no new winners" screen. Then on Wednesday I get a pleasant surprise, a letter from Fexco (dated the 16th) informing me that I had won 100 from bonds x and y and that the funds had been transferred to my bank account. Checked website - prizes now showing up. Checked bank account - funds now in it.

This letter was a different format than the correspondence that I normally get when I win and that added to the fact that the wins didn't show up initially makes me wonder what happened.


----------



## postman pat

curiouser and curiouser....


----------



## postman pat

It all smells a bit fishy...maybe prizebonds will be the next"banks"


----------



## Logo

Checked the website and I have won €50!

However the site says "In order to claim your prize you should write to us at the address below, enclosing your bond certificate;

The Prize Bond Company Ltd.
FEXCO Centre
Killorglin
Co. Kerry.
------
Anyone know if this is unusual (as I thought it would be posted to my address - the option selected).
Thanks.


----------



## The Ghoul

Logo said:


> Checked the website and I have won €50!
> 
> However the site says "In order to claim your prize you should write to us at the address below, enclosing your bond certificate;
> 
> The Prize Bond Company Ltd.
> FEXCO Centre
> Killorglin
> Co. Kerry.
> ------
> Anyone know if this is unusual (as I thought it would be posted to my address - the option selected).
> Thanks.


That's just a generic message that doesn't make a lot of sense - if you selected the postage option you don't have to do anything and will get your cheque in the post next week.


----------



## Rebuttal

With current deposit interest rates on offer, coupled with the State dipping into this meagre amount, in the form of dirt tax, I would say investing some monies in prize bonds is certainly a good option.


----------



## DirectDevil

Forgive me if this is a stupid question.

Suppose that I have a lump sum of €50K and decide to park it in prize bonds for a while. Are there any differences in my chances of winning if I make one purchase of €50K or make multiple separate purchases i.e. 10 purchases of €5k each.

Instinctively, I would think that the probability of winning would be the same. However, I wonder if there are any mathematical or other quirks that might say otherwise ?


----------



## dub_nerd

Rebuttal said:


> With current deposit interest rates on offer, coupled with the State dipping into this meagre amount, in the form of dirt tax, I would say investing some monies in prize bonds is certainly a good option.



It isn't. Do the numbers... or check my post about a dozen comments back up this thread. Investing in Prize Bonds _never_ made any sense unless it was at least in the (many) tens of thousands, but now it doesn't really make sense for _any_ amount.



DirectDevil said:


> Forgive me if this is a stupid question.
> 
> Suppose that I have a lump sum of €50K and decide to park it in prize bonds for a while. Are there any differences in my chances of winning if I make one purchase of €50K or make multiple separate purchases i.e. 10 purchases of €5k each.
> 
> Instinctively, I would think that the probability of winning would be the same. However, I wonder if there are any mathematical or other quirks that might say otherwise ?



No, you have the same chances regardless of the number of purchases that you split it across.


----------



## Grizzly

I have decided to start tidying up some of my odd purchases of Prize Bonds over the years and to encash these.
My first batch being sent off today were purchased in 1985. A lot of 15. I have never won any prize from any of this batch, even though a rough calculation would show that they would have participated in about 24,000 draws during that time. So a nil return for my €95 investment in just over 30 years.


----------



## dub_nerd

Grizzly said:


> I have decided to start tidying up some of my odd purchases of Prize Bonds over the years and to encash these.
> My first batch being sent off today were purchased in 1985. A lot of 15. I have never won any prize from any of this batch, even though a rough calculation would show that they would have participated in about 24,000 draws during that time. So a nil return for my €95 investment in just over 30 years.


This sounds about right. It's not quite correct to say that 15 held for 30 years has the same odds as 15 x 30 held for one year, but it's a rough approximation. Throwing that number into my calculator tells me that you had a 51% chance of winning nothing, a 34% chance of winning a single €50 prize, a 12% chance of winning 2 x €50, and 3% distributed among all other possibilities. You'd have to hold them for 100 years before your chance of winning something went to 90%. As has been said _ad nauseam_ on this thread, a low number of prize bonds really makes no sense as an investment, because the time horizon in which you are likely to achieve the average return is too long for most people. (And recently, the average return has become not worth it anyway).


----------



## postman pat

a question...why are people still buying prizebonds?,It kinda makes no sense at the moment  at least until interest rates start to rise again.


Pat


----------



## dub_nerd

postman pat said:


> a question...why are people still buying prizebonds?,It kinda makes no sense at the moment  at least until interest rates start to rise again.


Most prize bond purchases probably _never_ made any sense, unless you were buying at least several tens of thousands of euros worth. I'd say the short answer is people aren't very good at assessing probabilities, and the thought of having a permanent entry in a draw in which you never lose your stake is tantalising (even though you actually _do_ lose your stake ... to inflation).


----------



## postman pat

Yes I think maybe people buy into the dream of winning a large amount on prizebonds.Im my case when i had some, it was exciting at 12 30 on Friday checking the winning numbers etc,now i just do the lotto...


----------



## The Ghoul

Nothing today

However there is a news item on the PB website which I have just seen and is significant - as of 1st November, there is now a maximum holding of 250k euros per person. It is not retrospective so if you already have more than 250k you won't have to cash them in.
http://www.statesavings.ie/Downloads/Prizebonds_HomepageNotice.pdf

I am trying to figure out the implications of and reasons for this and whether it is a good or bad development  for investors. I think its probably bad. Anyone have any thoughts?


----------



## Fella

I bought some a couple of weeks ago and won 2 x 50 today . I don't think the maximum holding will make any difference to investors , only factor that matters really is the interest rate they are paying out , I could be wrong though.


----------



## Grizzly

The only reason I purchased mine was because interest rates are so low from the banks at the moment it is hardly worth while getting it. I might have a win on the Prize Bonds so it's a bit of fun.
If interest rates do rise and the prize fund rises accordingly it would not tempt me to hold them and I would cash them in.
Investing in a few Sterling based shares, paying good yields in Sterling has proved a better return for me. I am aware that share prices can fall as well as rise.


----------



## Grizzly

Grizzly said:


> I have decided to start tidying up some of my odd purchases of Prize Bonds over the years and to encash these.
> My first batch being sent off today were purchased in 1985. A lot of 15. I have never won any prize from any of this batch, even though a rough calculation would show that they would have participated in about 24,000 draws during that time. So a nil return for my €95 investment in just over 30 years.


  Received the above funds 9 days after I sent them in.

Next batch being redeemed today. 40 Prize Bonds that I have owned since 1984. Not one winner amongst them, despite being included in about 62,400 draws. So a nil return on my £200 purchase in 31 years on top of the previous nil return on a £75 lot held for 30 years.


----------



## noproblem

Does tax have to be paid on a win in the Prize Bonds?


----------



## postman pat

quick answer is no Noproblem


noproblem said:


> Does tax have to be paid on a win in the Prize Bonds?


----------



## DirectDevil

I read the new situation to be that you can add up to €250,000 in purchases *over and above* anything you held already before 1 November 2015. Is this right ?

I too am curious to know why this has been done. Is it to limit the potential prize fund liability for NTMA ?


----------



## dub_nerd

Grizzly said:


> Next batch being redeemed today. 40 Prize Bonds that I have owned since 1984. Not one winner amongst them, despite being included in about 62,400 draws. So a nil return on my £200 purchase in 31 years on top of the previous nil return on a £75 lot held for 30 years.


If the number of prize bonds in issue was the same as today, there'd have been nearly half a trillion other entries in those same draws. Allowing for historical fund growth, there might well have been a hundred billion. Sixty-odd thousand really isn't even a drop in the ocean by comparison. It would be a surprise if you _had_ won anything. The government won big though -- allowing for inflation they're only giving you half your money back.


----------



## The Ghoul

50 on Friday, first win for a few weeks.

If I look at how my 100k euro batch has performed in 2015 with 3 weeks to go.
21 x 50 euro prizes
1 x 100 euro prize
1150 euro total
1.15% net 

However my 75k batch that I cashed in a few weeks ago did worse than that.

I think that 1.15% net is pretty good in the current interest rate environment. Also, the PB prizes can be reinvested within a week of winning them whereas that is obviously not the case with a 1 year fixed term deposit or any other type of account where you have to wait for your interest.


----------



## The Ghoul

Not much to report
1 x 50 today
1 x 50 in the month of January
1 x 50 in the month of December

Three measly wins seems very little but it is a return of about 0.78% which is better than pretty much anything that the banks are currently offering


----------



## dub_nerd

From July, the Prize Bonds prize structure changes. The number of €1m prizes has been reduced from six to four, and the €100 prizes have been replaced by a much smaller number of €500 prizes. That is the _good_ part of the news about these changes, since a reduction in large prizes increases the proportion of the fund paid out in €50 prizes. Furthermore, the total amount invested in Prize Bonds (which also affects payouts) has increased from €2.3bn at the time of the last prize structure change in October 2014 to €2.6bn now.

Unfortunately the fraction of the fund paid out annually in prizes is changing from 1.25% to 0.85%. Taking all the changes into consideration, the average weekly number of €50 prizes will change from 7,200 to 5,700. And your chance of winning them goes down too, due to the 12% or so more prize bonds on issue.

In summary, the average return for an investor of €100k will fall from 0.81% to 0.58% tax free. Grossed up to the equivalent rate on a deposit account incurring DIRT, this is a fall from 1.5% to 1.0%.

Since rates have been dropping everywhere it's still ahead of most of the deposit products out there, but for me not worth the administrative hassle.


----------



## postman pat

I agree Dub_nerd,Its a shame really as i kind of liked the anticipation every Friday brought, maybe when interest rates start to rise a little prizebonds will be worth a punt again.

Pat


----------



## DirectDevil

Those are fairly severe cuts to the rates but I see the point about the relative value against other products.

Out of curiosity why are the rates being cut ?


----------



## dub_nerd

DirectDevil said:


> Out of curiosity why are the rates being cut ?


The NTMA doesn't need your money since they can borrow so cheaply elsewhere.


----------



## postman pat

I still have 3 prizebonds though....so im still hopeful!!


----------



## Cowpat

Hey dub_nerd. Long time follower here. Know you don't have a crystal ball and the stats look fairly bleak. €100k PBs  0.58% vs 5 years State Savings @ 0.98% guaranteed tax-free. Still tempted by PBs. So how much do you reckon statistically is a worthwhile investment in PBs to give an equivalent/ better return?


----------



## Cervelo

In last weeks draw there were 8834 €50 prizes, with the new rate that would drop to 5892


----------



## Cowpat

From dub_nerd's summary, the average return for an investor of €100k will fall from 0.81% to 0.58% tax free. Grossed up to the equivalent rate on a deposit account incurring DIRT, this is a fall from 1.5% to 1.0%.
Assuming I'm willing to put up with the administrative hassle and that Friday buzz, does this mean that an investor of €200k is statistically capable of earning 1.16% tax free?


----------



## dub_nerd

Hi Cowpat, no it doesn't work that way. You can't expect better than 0.58% return on _any_ amount of PBs (within reason). Increasing your holding just increases the chances that you will hit the average within a reasonable timeframe, rather than long periods of drought and sporadic wins. At €100k investment your most likely annual number of €50 wins is 11 (12% chance), but you have an 82% chance of getting between 7 and 15 (i.e. within about a third either side of the average). For €200k your most likely number of wins is 22 (i.e. still a 0.58% return), but you have a 92% chance of getting within a third either side. More money just smooths out the potential lumpiness of your return, it doesn't increase it.

Even postman pat with his 3 prize bonds will eventually hit the 0.58% average, but as he will only win once every 480 years _on average_ he will need a much longer time horizon. The same goes for the larger denominations of prizes -- everyone will actually eventually hit the 0.85% official payout that the NTMA say they are paying, but the distribution of larger denomination prizes is just so lumpy that it's not worth factoring into the calculation. For example, a third of the total payout is in €1m prizes. Even with a €100k investment you will only win one of those every 6,000 years on average. That's why I use 0.58% instead of 0.85% -- it only includes prizes you have a reasonable chance of winning within a sensible time horizon.

The only thing that could possibly tempt me about Prize Bonds is that for €100k your prizes would be coming in about once a month on average. That is a steady accumulation of your "interest", whereas for 5 year Savings Certs, even though you have access to your money any time you want you would forfeit most of your interest on early withdrawal. To be honest, none of them really tempt me at all ... I can still get about 0.4% after tax from the bank and would prefer to keep my money where it can be redeployed quickly if needed.


----------



## DirectDevil

Is there a problem with the prizebonds website ? I got some new ones last week and wanted to register them on the site. I keep getting an "application error" message when I try to  log in to my list of bonds.

I did try their online contact form but that keeps telling me that the number of characters in the message seem to be too long and they are not and it will not send the query !


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## Palerider

I have €300k+ in PB's the last few years, sporadic ' wins ', after the recent changes I think it is time it started working harder, accessing the website every Friday is no longer fun as frequently there is a nil return for me and a whopper of a return for the Govt.


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## DirectDevil

As at April 2016 the value of Prize Bonds shows as €2.6 billion.

Stupid question I know but is this billion one thousand million or a million million ?


----------



## Connard

DirectDevil said:


> As at April 2016 the value of Prize Bonds shows as €2.6 billion.
> 
> Stupid question I know but is this billion one thousand million or a million million ?


 1,000 million


----------



## dub_nerd

Since August 2017, the official return on Prize Bonds is 0.5%. In practice, you have to look at the return in €50 prizes only which is 0.27% (or 0.28% if you include €100 prizes). These are the only ones you have any realistic chance of winning.

With DIRT rates set to fall to 37%, the grossed up equivalent interest rate in a bank account incurring DIRT is 0.43%. If you look at the Savings Best Buys thread, there are still some accounts paying better than this. Prize Bonds are therefore a poor investment at present.

As usual, the lumpiness of Prize bonds returns means that they will _never_ be a good investment for amounts less than several tens of thousands of euro.


----------



## dub_nerd

Do you have to be a rocket scientist to invest in Prize Bonds? No, but it helps. This graphic is taken from a graduate level course in astrophysics. It's about the noise levels associated with taking photographs of objects in deep space (which is why the axis is labelled "photons received").








But what's this got to do with Prize Bonds? The probabilities of winning on Prize Bonds also follow a Poisson distribution (as do the probabilities of _any_ set of rare events that each have an independent chance of happening). Think of μ (Greek letter _mu_, signifying mean or average) as the number of events that will occur if the odds work out exactly "normally".

In our case μ is not "_photons received_", but "_prizes won_". The height of the graph is the odds of winning different numbers of prizes. The peak of the graph is always at μ because that's the most likely number you will win. But look at the top graph where μ is small. There is also a significant chance that you will win zero prizes. This is a so-called "noisy distribution". For large μ (bottom graph) the graph is smoother and you are more likely to achieve the expected return or close to it.

Bottom line: when buying Prize Bonds you have to invest a large enough amount to make it likely that you will achieve the average return. (And as I've mentioned before, the average return these days isn't very good).


----------



## Cervelo

dub_nerd said:


> Bottom line: when buying Prize Bonds you have to invest a large enough amount to make it likely that you will achieve the average return. (And as I've mentioned before, the average return these days isn't very good).



Any idea what that magical "amount" would be given the size of the fund and the prizes awarded ??


----------



## Duke of Marmalade

Cervelo said:


> Any idea what that magical "amount" would be given the size of the fund and the prizes awarded ??


Prize Bonds distribute currently .5% p.a. tax  free.  But only about .35% is given in the €50 prizes.  Still that’s about double typical after tax deposit rates.  I think if you can expect about 2 standard deviations clear of that then you are getting well compensated for the uncertainty.

The standard deviation is the square root of mu, so you want the square root of mu to be less than mu/4.  That gives the critical value of mu to be 16 (€50 prizes).  At current payout ratios of .35% that implies a Prize Bond exposure of c. 230,000 €-years.  The max joint holding is €500k so you would need a c. 6 month horizon to reach the “magical” exposure.  If your horizon is say 5 years then you only need c. €50k to make the mark.

Of course if you put a much lesser price on uncertainty the magical exposure is much less. Indeed at these low rates you might place no price on uncertainty, you might even welcome it, in that case any amount will suffice.


----------



## dub_nerd

Thanks Duke. As usual, you are way out of my league! 

I am currently grappling with exposure lengths to get a desired signal-to-noise ratio in astronomical imaging ... it's kinda weird (although also kinda obvious ... but weird) that the "exposure length" to prize bonds works precisely the same way.


----------



## lledlledlled

dub_nerd said:


> Since August 2017, the official return on Prize Bonds is 0.5%. In practice, you have to look at the return in €50 prizes only which is 0.27% (or 0.28% if you include €100 prizes). These are the only ones you have any realistic chance of winning.
> 
> With DIRT rates set to fall to 37%, the grossed up equivalent interest rate in a bank account incurring DIRT is 0.43%. If you look at the Savings Best Buys thread, there are still some accounts paying better than this. Prize Bonds are therefore a poor investment at present.
> 
> As usual, the lumpiness of Prize bonds returns means that they will _never_ be a good investment for amounts less than several tens of thousands of euro.



So PB interest rates are twice as crap as bank interest rates. 
But bank interest rates are still so tiny that you might as well have a (slim) chance of a big prize that PBs offer.


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## dub_nerd

I take the view that they're _all_ crap. It's effectively money-under-the-mattress time. It comes down to choosing the safest mattress -- for me that's Rabo at present.


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## SoylentGreen

I find that I am upping my spend rather than stick it under the mattress. Better hotel rooms, better and therefore more expensive flight times, better quality food, (more fillet steaks), not being so mean with the central heating etc. I broke in to a sweat recently when I put some money in a parking meter instead of walking the extra half mile 

I have €200k in Prize Bonds. I have not had a win in a few weeks now. I find my attitude is changing in how I spend my money. It might be just an age thing though.


----------



## lledlledlled

dub_nerd said:


> I take the view that they're _all_ crap. It's effectively money-under-the-mattress time. It comes down to choosing the safest mattress -- for me that's Rabo at present.



But at least with PBs, you'd have a (slim) chance of winning a large sum of money. No chance of that with Rabo or under mattress. 
I would also see PBs as a relatively safe place to keep money.


----------



## Buddyboy

There is also the "thrill" between taking the letter from Kerry from the postbox, and walking into the house.  In that moment, you know you have won something, but you don't know how much.  Even if (as has always been the case), you get a cheque for €50, that is a great boost, in comparison to the invisibility of bank interest.

I get the same thrill when getting the email from the Lotto, saying that I have won a prize, and to check my on-line lotto account.

It's the little things 

And, I also agree with SoylentGreen (must also be an age thing),  enhancing the experiences, and living life is a great way of spending some of the savings.


----------



## dub_nerd

lledlledlled said:


> But at least with PBs, you'd have a (slim) chance of winning a large sum of money. No chance of that with Rabo or under mattress.



The chance is depressingly small. I don't find it influences my decision to (not) buy PBs. But I can see the psychology of it, which probably explains why the large prizes have been increased on some occasions when the total payout has been reduced.



lledlledlled said:


> I would also see PBs as a relatively safe place to keep money.



I agree with that -- probably one of the safest. But again, not so much safer that I could be persuaded to forego having the money in a bank account where it can be withdrawn or transferred without the administrative hassle associated with PBs.


----------



## DirectDevil

SoylentGreen said:


> I find that I am upping my spend rather than stick it under the mattress. Better hotel rooms, better and therefore more expensive flight times, better quality food, (more fillet steaks), not being so mean with the central heating etc. I broke in to a sweat recently when I put some money in a parking meter instead of walking the extra half mile
> 
> I have €200k in Prize Bonds. I have not had a win in a few weeks now. I find my attitude is changing in how I spend my money. It might be just an age thing though.



I don't think it is age related . I suspect that rates of return are so poor on state savings type products that we are effectively being encouraged, in exasperation, to spend it all and generate more life in the economy.....


----------



## DirectDevil

A slightly odd one that I heard about over Christmas.

My cousin reached the maximum Prize Bonds holding limit of €250,000 (post November 2015).
He gets any winnings lodged directly to his bank account.
Even though he holds the limit of €250,000 he can still reinvest any winnings if he applies within 30 days of the win.
He had a few wins and reinvested by cheque and the standard application form with no problem.
He just got a letter from Prize Bonds to say that they will just not accept such reinvestments any more by this method. It seems that they want the reinvestment made by returning the winning cheque and the form that goes with it or to opt for automatic reinvestment 
If he gets winnings automatically lodged to his bank account how can he return a winning cheque and it's associated form if he does not get either of those in the first place  This almost seems to preclude him from reinvesting as things stand ?
They did suggest availing of automatic reinvestment. What occurred to me was that if he got a big win it would have to be reinvested and held for 90 days as is the case with any prize bonds newly purchased

Any thoughts ?


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## DirectDevil

Follow up on preceding post.

Prize Bonds Co made an error - no problem it seems !


----------



## theresa1

Due to the Red Weather Alert from Thursday afternoon the 1st March to midday Friday the 2nd March the Prize Bond draw which was to have taken place on the morning of Friday 2nd March will now take place on Monday the 5th March.


----------



## STEINER

€30,000 worth bought 2 years ago.  €500 won recently.


----------



## xoxoxo

Was the €500 a single won or 10 x €50. Well done - I have twice what you have for the past 5 years and haven't even won €300. Nothing at all this year!


----------



## STEINER

xoxoxo said:


> Was the €500 a single won or 10 x €50.



single €500.


----------



## xoxoxo

Well done to you - haven't heard of anyone winning €500 before. It's usually €50 on here and the odd €100. Maybe I won't give up hope yet  enjoy your winnings.


----------



## Palerider

Nice one Steiner, I managed to snare one 'win' of €1000 a few months back, it averaged out my 2017 annual returns nicely ahead of the best one year rate and no dirt payable.


----------



## Ravima

€40K purchased Feb 17, 2 x €50 wins.


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## honeybadger12

€5,000 purchased 4 years ago, have won €10. A nice 0.002% return on my money lol


----------



## dub_nerd

honeybadger12 said:


> €5,000 purchased 4 years ago, have won €10. A nice 0.002% return on my money lol


???
€10 is 0.2% of €5,000.
But there aren't any €10 prizes.  The minimum you can win is €50.
If you won a single €50 prize your return is 1%, which is pretty much exactly what you'd expect to average over four years at current payout rates.


----------



## Mortgagey

Does anyone know how I might make a large one-off purchase? It seems some of the options are restricted to £1k per transactions.

I am looking to purchase c. 25k euros worth.


----------



## Palerider

Mortgagey said:


> Does anyone know how I might make a large one-off purchase? It seems some of the options are restricted to £1k per transactions.
> 
> I am looking to purchase c. 25k euros worth.



You can buy online, its a poor system as you have to go through it, filling in the blanks as you go and then it limits your purchase to a small sum but if you hit the back button it will give you an option to buy a lump sum on your card.


----------



## Logo

*Weekly prizes range from €50 to €50,000, with a €1m prize twice a year. *(PB Website)

I've dabbled in Prize Bonds over the years and often checked out AAM & boards.ie for info. I've only ever had a few €50 winners - and have never heard from a big winner except for the recent €500 win by .

Do people actually win €50,000 every week and €1M twice a year?


----------



## Monbretia

Trying to buy a large sum myself these days but have given up for the time being with the warm weather  

I don't have a debit card and my bank UB will not issue a draft to An Post/NTMA and there is no other option it seems, don't have a personal cheque book either and haven't had for maybe 30 yrs.   Rang up and their suggestion is that I lodge the money in the credit union as they will give a draft for it.  All that puts me off that option is the length of the queues in my local CU, out the door most days!


----------



## dub_nerd

Logo said:


> ...have never heard from a big winner except for the recent €500 win by . Do people actually win €50,000 every week and €1M twice a year?



The number of €m winners is smaller than the number of people struck by lightning each year. How many of _those_ do you know? 



Monbretia said:


> Trying to buy a large sum myself these days but have given up for the time being...



Yeah, I find it bewildering that I can't just do a bank transfer for all NTMA/State Savings, and get the money back the same way. Although I've done it by cheque, I find it a considerable deterrent.


----------



## Logo

*Weekly prizes range from €50 to €50,000, with a €1m prize twice a year. *(PB Website)



Logo said:


> Do people actually win €50,000 every week and €1M twice a year?



Surely I would have heard of at least one €50K winner - especially if there is one winner each week and I've lived in a small town for the past 50 years.



dub_nerd said:


> The number of €m winners is smaller than the number of people struck by lightning each year. How many of _those_ do you know?


Yet two people win €1 Million each year and I have yet to meet one. At least I can justify not meeting those struck by lightening because they are no longer around to tell the tale.


----------



## dub_nerd

Logo said:


> At least I can justify not meeting those struck by lightening because they are no longer around to tell the tale.



Not true. Most people struck by lightning survive.



Logo said:


> *Weekly prizes range from €50 to €50,000, with a €1m prize twice a year. *(PB Website)
> 
> Surely I would have heard of at least one €50K winner - especially if there is one winner each week and I've lived in a small town for the past 50 years.



If you're going to gamble you should develop an intuition for odds. 
What _are_ the odds that you would have heard of a €50k winner if you were living in a small town for 50 years?

Let's make some simplifying assumptions: 1) everybody in the country is equally likely to buy prize bonds, 2) you've lived in the same small town for 50 years with a fixed population of _p_ people, and the population of the country has been fixed at 4 million, 3) anyone in your town who wins €50k will instantly come blabbing to you, whereas you won't hear of anyone outside the town.

With this sort of problem it's easier to work out the odds of _not_ hearing of a winner, then get the other odds by subtraction. This is because the odds of doing something again and again are multiplicative. So we work out the odds that someone _not_ in your town wins the €50k in one week, and then we raise that to the power of 52 weeks x 50 years = 2600. So the probability of no €50k winner in your town in 50 years is:







In Excel or Google Sheets you could do this with: _=POWER((4000000-A1)/4000000,2600)_, where A1 is the population _p_ of your town. If your town's population is 5,000 there is a 4% chance of no winner, and therefore a 96% chance that you will have heard of a winner. But if you live in a hamlet of 1,000 people there is a better than evens chance you will never have come across a winner.


----------



## Logo

I can only thank you for the stats Dub_Nerd. Population of me to the power of _(4000000-A1)/4000000,2600) _that I have less of a clue now about statistics than when I was a student of probability_. _Regardless of the town size, I have yet to read online of a winner besides STEINER of any substantial sum.
You convinced me (or bamboozled me) on the stats front based on a small town but I still can't get away from the great Prize Bonds PR claim that *Weekly prizes range from €50 to €50,000, with a €1m prize twice a year.*


----------



## Palerider

If I got the €50k nobody would know unless I told them, I did get €1000 in one payout last year, this year has been truly shocking but we live in hope in the PB members only club.


----------



## dub_nerd

Logo said:


> You convinced me (or bamboozled me) on the stats front based on a small town but I still can't get away from the great Prize Bonds PR claim that *Weekly prizes range from €50 to €50,000, with a €1m prize twice a year.*



The €1m doesn't increase your chances of hearing about anything, because it replaces the €50k on the weeks when it occurs. Ok, there are ten times as many €500 and €1,000 prizes but are people really going to be singing from the rooftops about those sorts of amounts, even in a small town? They're probably thinking it'll buy no more than a few rounds for the scroungers down the local, and keeping shtum.

I think the real lesson is that your chances of winning anything significant are really, truly tiny. And that's what I've been saying on these pages right from the beginning. If you are going to invest in Prize Bonds the only sensible approach is to calculate the return in €50 prizes only, and to buy enough of them (i.e. many tens of thousands of euro) to make the average return likely in short order. And since that return is now down to 0.27% tax free, I wouldn't consider them worth while at all. And therein lies their cleverness ... the lure of the (impossible) €1m is obviously still sucking people in.


----------



## SoylentGreen

I have €210k of Prize Bonds. I win €50 about every 3rd week. Last week it was €100.  I have never won anything bigger than this over the 3 years I have had them.
I get a dividend four times a year from a pharmaceutical company of about 6%. I really should move my prize bond funds in to these shares as they have been paying this dividend for years. However the share price took a knock earlier this year when it was suggested that going forward this dividend may be at risk. They have begun to recover now and back above what I paid for them.
I don't like keeping all my eggs in the one basket. Like Palerider says I live in hope that I might win one of the bigger prizes and it's a bit of fun as well. 
However when I see that dividend come through my letter box four times a year that will cover the price of a week away in the sun I wonder am I being foolish in hoping that a big win is just around the corner.


----------



## dub_nerd

SoylentGreen said:


> ...I wonder am I being foolish in hoping that a big win is just around the corner.



Uh, yes you are. With your 6% dividend you would gain the equivalent of a €50k win every four years. You hold less than a hundredth of one percent of issued Prize Bonds. You'll win a €50k prize every *three hundred years* on average. You'll win a million every seven thousand years. If you built the passage graves at Newgrange with your last win, you're due another one any millennium now*.




(* N.B. That was for rhetorical effect and way too optimistic. You still have a couple of thousand years to go).


----------



## NOAH

What has happened to prize bond payouts ie prizes, I have quite a few and was regularly getting €50.00 per week but since July 2018 only one prize!!  The website changed around then as well,  have the number of prizes decreased dramatically?


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## dub_nerd

Don't think it was specifically in July. Prize Bonds returns have been dropping for some time. Typical returns are a quarter of what they were four years ago.


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## xoxoxo

Have just short of €100k in prize kids and in the past 12 months i have won a grand total of €50 and that was back in December 2017. So nothing at all in 2018. I think it's time I ,poked for a better rthan turn on my money


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## dub_nerd

xoxoxo said:


> Have just short of €100k in prize kids and in the past 12 months i have won a grand total of €50 and that was back in December 2017. So nothing at all in 2018. I think it's time I ,poked for a better rthan turn on my money



That does sound odd. Even at the current shoddy returns your most likely number of wins on €100k in a 12 month period is 6. You have a better than 90% chance of winning between 3 and 11 times. The chances of only a single win in 12 months are less than one in a hundred. Either you've been extraordinarily unlucky or there's something wrong. Here are the odds for different numbers of wins:


----------



## Cervelo

One thing I feel that people forget about the Prize Bonds is the number of bonds chasing the prizes
Last weeks draw had over 536 million bonds looking to win one of the 4437 prizes
And every week there is on average an extra million bonds added to the draw but only around an extra 40 prizes are added every month

Your lack of winnings is what the rest of us bond holders are experiencing, the past 12 months is the first time in 6 years that my winnings haven't beaten the prize fund rate


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## Odea

I could purchase an apartment in Spain with the amount of money I have "invested" in Prize Bonds. It's very tempting to do this. At least the family could enjoy it. Not enjoying the returns on my Prize Bonds at the moment.


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## xoxoxo

dub_nerd said:


> That does sound odd. Even at the current shoddy returns your most likely number of wins on €100k in a 12 month period is 6. You have a better than 90% chance of winning between 3 and 11 times. The chances of only a single win in 12 months are less than one in a hundred. Either you've been extraordinarily unlucky or there's something wrong. Here are the odds for different numbers of wins:



I know! I had approx 75k worth and only brought up to the just under 100k Last January  but really would expect a higher return. Must just be very unlucky as I can't figure anything else amiss - have bonds, are registered etc. Here's hoping I'll have a big win soon


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## SHEEPFARMER

I had 140,000 in Prize bonds. Bought last January it was ok for the first 4 months I won 200 euro 4*50. Since May 2018 I have won nothing. They seem to favour the Dublin bought bonds more but I'm a farmer.. lol So I am pulling out and going with a 5 year savings cert at least I will get 5000 grand... Not sure if the prize bonds is a good option has something changed this year? I read here a few others are having similar returns as me? maybe I will buy some in the GPO this time or borrow a Dublin address...


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## dub_nerd

Your most likely number of wins in a year is nine. At four in four months you were ahead of the game. At four in over nine months you are behind. But nothing especially unusual about it. Dublin addresses are favoured because a quarter of the population lives there -- and the highest earning quarter -- so there are a disproportionate amount of Dublin-owned prize bonds. Every prize bond has an equal chance. The algorithm that picks the winners has no idea what your address is.


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## SHEEPFARMER

9x wins at 50 euro 450 euros and a chance to win higher.... maybe 100,000 in saving cert =1000 euros a year and then 20000 in prize bonds.......in with a chance of a bigger win..... up the Dubs


----------



## susano

dub_nerd said:


> That does sound odd. Even at the current shoddy returns your most likely number of wins on €100k in a 12 month period is 6. You have a better than 90% chance of winning between 3 and 11 times. The chances of only a single win in 12 months are less than one in a hundred. Either you've been extraordinarily unlucky or there's something wrong. Here are the odds for different numbers of wins:



Mind me asking how you're arriving at those percentages? Just so I can input a different investment total.


----------



## dub_nerd

susano said:


> Mind me asking how you're arriving at those percentages? Just so I can input a different investment total.



Don't mind at all, in fact use this this Google sheet (but see end note below). Anyone can edit it, preferably without breaking it. It may take a few moments to load, but there are two tabs at the bottom for Chart and Tables. On the Chart sheet you can type in the amount of your investment in the box provided and the chart will show the probabilities for each number of €50 wins.

The 'smarts' are on the Tables sheet. Hopefully it is mostly self-explanatory, and it has links to the input parameters from the Prize Bonds web site. Basically it makes the simplifying assumption that your wins will all be €50 prizes which is reasonable given that the number of individual prizes higher than €50 is only 0.5% of the total. It is straightforward to then calculate that the expected return on your investment is presently 0.33% tax free. The calculations are all set out in the spreadsheet. However, since you must win a discrete number of €50 prizes the returns will be lumpy for small investments although they will average out given enough time.

The odds of receiving any particular discrete number of prizes in a year are a little harder to calculate. I used to use a bunch of complicated combinatorics which involved numbers bigger than the spreadsheet could handle without hacky workarounds. Then another user on here, Duke of Marmalade, helpfully pointed out that the wins should follow a Poisson distribution. When it did indeed produce identical results I was sold. So we combine your investment, _I_, with the expected average return of 0.33% to give the average number of €50 wins:






The probability for any given number of €50 wins, _k_, is then given by the Poisson distribution:







_A small note on using the Google spreadsheet linked earlier: Google tracks your changes so other users may be able to see your signed-in Google username against your edits. Keep this in mind if you prefer to be anonymous._


----------



## Janet

Evander73 said:


> ....
> 
> I suppose if you won even the smallest prize of 50 euro just once a year, you'd be no worse off than if you'd placed it on deposit (with an outside outside chance of winning something bigger). If...



It took them a few years to catch up but the Irish Times seems to agree with you today. 



> Prize Bond winnings are not subject to Dirt or other taxes, which means that even if someone puts € 10,000 into prize bonds and wins just € 50 a year, they will have done better than putting their money in the top paying deposit account.


----------



## postman pat

I suppose if prize bonds  beats money on deposit it does not mean  that its a good investment,I would think that a person needs  10 000 euros to work a bit harder for them than getting 50 euros a year on it.

Pat


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## Palerider

I'm heavy into the pb's and enjoyed the arrival of a regular €50 fairly often but so far this year it has been sporadic, I'm considering going a different route very soon, bit disappointing really.


----------



## NoRegretsCoyote

So the expected return on a prize bond portfolio is 0.5%. In effect it is a bit lower than that because, even with a large portfolio, you are most likely to win €500 and €1000 prizes. 

For return, I can't see how this beats tax-free savings certificates at about 1% over five years. 

Prize bonds are of course more liquid, but KBC will give you 0.3% on a 35-day notice account. This is reduced of course with DIRT, but it as at least guaranteed, while prize bond returns fluctuate, even on a very large portfolio.

So why on earth does anyone hold prize bonds anymore?


----------



## dub_nerd

Janet said:


> It took them a few years to catch up but the Irish Times seems to agree with you today.





			
				Irish Time said:
			
		

> Prize Bond winnings are not subject to Dirt or other taxes, which means that even if someone puts € 10,000 into prize bonds and wins just € 50 a year, they will have done better than putting their money in the top paying deposit account.



What a weird assertion by the Irish times. It's meaningless unless you know the annual odds of winning €50 on an investment of €10k. As it happens, you've a better than 50% chance of winning no prize at all. The overall average return is about 0.33% ... which doesn't justify the administrative hassle in my view, compared to having access to your money in a bank.

By the way, my Google Sheets Prize Bonds modeler is still available here, as always:

https://drive.google.com/open?id=16v6Br0IuG46HjNF7wcePcmxKcDStTb5mCTSfscE-j4o


----------



## Palerider

I have noticed new bond purchases I make result in an early €50 or two.

Old larger holdings languish.

A friend rang up to check his sons €17000 in pb's were actually in the draw as he expected something over almost six months, they confirmed he was, the week after he got €50,

Odd.


----------



## MugsGame

_Update- This post is a response to some ill informed conspiracy theory posts which have no place on Askaboutmoney - Brendan _


Fexco do a lot more than draw prize bonds; all companies in similar sectors are growing, so it's no surprise they're hiring.

We and indeed the PB auditors don't need to look at the code.

The winning prize bonds numbers are published for  each draw. Do an FOI request to get  the PBs entered in each draw, and then run some statistical tests to check the distribution is as expected.

This might not rule out very infrequent prize allocation errors, but should rule out significant problems or anything nefarious. Even PBs wrongly omitted from draws should be detectable with some assumptions (PBs are allocated in sequence so related PBs should enter the pool together, and PBs should not leave and re-enter the pool frequently).


----------



## masterboy123

Thanks for the Google sheet. I have 10,000 to invest and wondering if you have another Google sheet which shows probability of winning million euros? 



dub_nerd said:


> What a weird assertion by the Irish times. It's meaningless unless you know the annual odds of winning €50 on an investment of €10k. As it happens, you've a better than 50% chance of winning no prize at all. The overall average return is about 0.33% ... which doesn't justify the administrative hassle in my view, compared to having access to your money in a bank.
> 
> By the way, my Google Sheets Prize Bonds modeler is still available here, as always:
> 
> https://drive.google.com/open?id=16v6Br0IuG46HjNF7wcePcmxKcDStTb5mCTSfscE-j4o


----------



## dub_nerd

masterboy123 said:


> I have 10,000 to invest and wondering if you have another Google sheet which shows probability of winning million euros?


You don't need a spreadsheet for that, you can do it in your head. You are investing 10,000. The total invested in Prize Bonds (as of Oct '18) is 3,100,000,000. Therefore you have one chance in 310,000 in each draw. Since there are two draws each year for €1m, you will win one on average every one hundred and fifty-five thousand years.

In other words, you are a very tiny rounding error away from zero chance of winning. It is well known that the human psyche is so constructed that it wildly overestimates the chances of success in scenarios where there is relatively little downside (e.g. foregoing a better interest rate on your money). That's why so many reason that "someone has to win the prize so it might just as well be me" (which is incorrect). It makes a lot more sense to consider whether it is worth your while investing for the €33 euro average annual return on your €10k.


----------



## podgerodge

@dub_nerd I take your point on a 0.27% tax free return being not worthwhile (is this still up to date?) , but I'm scrambling to see a guaranteed return much greater?  With, say, €150k to 'invest', is there really much difference between PB expectations and putting them in a Bank - perhaps 0.1%?  Perhaps that is worth the 'dream' factor?!


----------



## dub_nerd

No, there is very little difference which is why I'm inclined to think it's not worth the hassle. Objectively, the "dream factor" is worth essentially zero, but if it makes a psychological difference then more power to you. My own opinion is that it's worth training yourself out of such sentiments as they might be more dangerous in another situation if, say, you were prone to a gambling addiction.

There is one other factor which might favour Prize Bonds, and that is spreading institutional risk. Our banks are still far from in good shape -- look at their share price performance over the last year or two. Non-performing loans continue to be a problem in spite of many being sold off. This week we should have the latest Central Bank mortgage arrears report which I expect to show that progress is still glacial.


----------



## podgerodge

dub_nerd said:


> No, there is very little difference which is why I'm inclined to think it's not worth the hassle. Objectively, the "dream factor" is worth essentially zero, but if it makes a psychological difference then more power to you. My own opinion is that it's worth training yourself out of such sentiments as they might be more dangerous in another situation if, say, you were prone to a gambling addiction.
> 
> There is one other factor which might favour Prize Bonds, and that is spreading institutional risk. Our banks are still far from in good shape -- look at their share price performance over the last year or two. Non-performing loans continue to be a problem in spite of many being sold off. This week we should have the latest Central Bank mortgage arrears report which I expect to show that progress is still glacial.



Thanks dub_nerd.  Ironically, I am leaning towards the opposite - that the hassle of bothering with another bank for practically no difference in return makes the "dream factor" at least a bit of fun given that we are talking peanuts in the scheme of things.  But I would do it with a very certain mentality that it was for fun with no expectations!


----------



## Duke of Marmalade

podgerodge said:


> Thanks dub_nerd.  Ironically, I am leaning towards the opposite - that the hassle of bothering with another bank for practically no difference in return makes the "dream factor" at least a bit of fun given that we are talking peanuts in the scheme of things.  But I would do it with a very certain mentality that it was for fun with no expectations!


_podge_ I have maxed out in Prize Bonds.  Admittedly I was in before the last cut and the hassle factor for me would have been getting out.  Every Friday at 12.30 I have a bit of fun looking at the draw results online.  Actually the dream factor satisfies my Lotto itch.  mathematically the dream factor is worth about 0.20%.  But if you have a Lotto itch and this satisfies it you can value that at around 0.5% as Lotto "investments" are subject to about 70% tax and expenses.


----------



## SlugBreath

I have always enjoyed receiving my cheque in the post when I have a Prize Bond win.
I see that the rules have changed. You can no longer have your win posted to you by way of cheque. You can only have it lodged in to our bank account or re-invested.
Today, in place of my €50 cheque I got eight new Prize Bonds in it's place. Just not the same. I don't need more Prize Bonds.

I know many people prefer to have their wins lodged direct in to their bank account.  Any thoughts?


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## SparkRite

Well I don't have that concern, over €45K in since last June and zilch, zero, nada....


----------



## Philip S

dub_nerd said:


> What a weird assertion by the Irish times. It's meaningless unless you know the annual odds of winning €50 on an investment of €10k. As it happens, you've a better than 50% chance of winning no prize at all. The overall average return is about 0.33% ... which doesn't justify the administrative hassle in my view, compared to having access to your money in a bank.
> 
> By the way, my Google Sheets Prize Bonds modeler is still available here, as always:
> 
> https://drive.google.com/open?id=16v6Br0IuG46HjNF7wcePcmxKcDStTb5mCTSfscE-j4o



Thank you for the modeling sheet. It appears you need to invest €15,175 to be in a case where change a wining 1 prize is greater then no prize. wondering what timespan would you be looking over. There is a large difference in winning 1 prize every 5 years against if i live to be 100 (now 33) i will win one prize over that time


----------



## jpd

in a year


----------



## Mike

Hi all,

Can I just clarify, if I have an account with An Post does this reduce the amount I can have in Prizebonds and still be covered by the State guarantee?

Also, is it wise to be considering Prizebond at present with the way economy etc is going?

Thanks


----------



## Saavy99

Mike said:


> Hi all,
> 
> Can I just clarify, if I have an account with An Post does this reduce the amount I can have in Prizebonds and still be covered by the State guarantee?
> 
> Also, is it wise to be considering Prizebond at present with the way economy etc is going?
> 
> Thanks
> 
> Your money is as safe in prize bonds as it would be in a bank or credit union.  Not sure about the state guarantee with An Post, I think it's 100,000 per person in total.


----------



## RedOnion

Saavy99 said:


> Your money is as safe in prize bonds as it would be in a bank or credit union. Not sure about the state guarantee with An Post, I think it's 100,000 per person in total.


Just to clarify:

State savings, including prize bonds, are Irish Sovereign debt. They're guaranteed by the state, and have nothing to do with the deposit guarantee scheme, or An Post.

The guaranteed amount of state savings is unlimited, but there are limits on the amounts of each product/issue that an individual can purchase.


----------



## Saavy99

Red Onion, thanks for clarifying.


----------



## Lockup

guarantee is per person per institution up to 100k


----------



## RedOnion

Lockup said:


> guarantee is per person per institution up to 100k


The thread is about prize bonds. There is no limit.


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## RobFer

Seems there is an increase in prize bond purchasing during the crisis, however, I would have thought that this is the worst time to buy prize bonds.


----------



## Saavy99

RobFer said:


> Seems there is an increase in prize bond purchasing during the crisis, however, I would have thought that this is the worst time to buy prize bonds.




Why do you say that?


----------



## RobFer

Saavy99 said:


> Why do you say that?


I would imagine they are a good place to dump money when equities are expensive but now the stock markets is declining so it's surely the wrong time to be buying prize bonds or any low risk assets.


----------



## Duke of Marmalade

RobFer said:


> I would imagine they are a good place to dump money when equities are expensive but now the stock markets is declining so it's surely the wrong time to be buying prize bonds or any low risk assets.


The conventional wisdom in these parts is that you can never make any inference about whether stock markets are expensive or otherwise.  No one can tell.
What almost any commentator would say though, is that the future for stockmarkets is hugely uncertain at the present time - from V shaped bounce to worst depression since the 30s.  So it is valid to assume that they are much riskier than usual at the moment and therefore low risk assets are especially to be favoured by anyone of a nervous disposition.
Bravehearts on the other hand will argue that the elevated perception of the risk of equities will have fed through to the price - the risk reward argument.


----------



## cmalone

Understand that their new  system is they ‘credit’ you with additional prize bonds - but you can ‘cash out’ at any time....


----------



## RobFer

Duke of Marmalade said:


> The conventional wisdom in these parts is that you can never make any inference about whether stock markets are expensive or otherwise.  No one can tell.
> What almost any commentator would say though, is that the future for stockmarkets is hugely uncertain at the present time - from V shaped bounce to worst depression since the 30s.  So it is valid to assume that they are much riskier than usual at the moment and therefore low risk assets are especially to be favoured by anyone of a nervous disposition.
> Bravehearts on the other hand will argue that the elevated perception of the risk of equities will have fed through to the price - the risk reward argument.




The idea that it is near impossible to predict the value of equalities is a fair theory and it might be true but if it is true, then it is still a terrible time to increase your money in prize bonds. People have been talking about overdue bear markets for years now. Now the bear is here, it seems to me that risk is less but yes highly debatably.


----------



## Saavy99

Yes, I see your point but not everyone has an appetite to invest in stork market, interest rates are at zero so might as well gamble on the prize bonds.


----------



## Monbretia

cmalone said:


> Understand that their new  system is they ‘credit’ you with additional prize bonds - but you can ‘cash out’ at any time....



I got a letter recently from them where they said they will not be sending out cheques for small prizes in future and there was two alternative options, have it transferred to a bank account or have it issued in new prize bonds.   I take the cash


----------



## Duke of Marmalade

RobFer said:


> .. it seems to me that risk is less...


Perception of risk by market practitioners is actually measured in the US by what is called the VIX index.  It is a complicated animal but if you want to take it at face value it measures how risky practitioners view current market prices.  It is dubbed the Fear Index. See it here.
You will see that the Fear Index has been greatly elevated in recent times and whilst it has eased a little it is still around 3 times higher than before the crisis.  However, that is just what the folk on Wall Street think and you may be right.


----------



## RobFer

Duke of Marmalade said:


> Perception of risk by market practitioners is actually measured in the US by what is called the VIX index.  It is a complicated animal but if you want to take it at face value it measures how risky practitioners view current market prices.  It is dubbed the Fear Index. See it here.
> You will see that the Fear Index has been greatly elevated in recent times and whilst it has eased a little it is still around 3 times higher than before the crisis.  However, that is just what the folk on Wall Street think and you may be right.



I agree. My comment was basically invest when there is blood on the streets, which is riskier now but that kind of risk is less a concern to a sit and hold man, especially with a long horizon like myself and I didnt clarity that.


----------



## Duke of Marmalade

Fair point.  The huge short term fear factor might indeed point to equities being a long term steal.


----------



## EmmDee

Duke of Marmalade said:


> Perception of risk by market practitioners is actually measured in the US by what is called the VIX index.  It is a complicated animal but if you want to take it at face value it measures how risky practitioners view current market prices.  It is dubbed the Fear Index. See it here.
> You will see that the Fear Index has been greatly elevated in recent times and whilst it has eased a little it is still around 3 times higher than before the crisis.  However, that is just what the folk on Wall Street think and you may be right.



VIX is Volatility IndeX - it is derived from the implied volatility measure from equity options. Increased implied volatility might imply more risk but it isn't a direct measure of how practitioners feel about risk. Implied volatility is partially derived from historic price volatility along with current option pricing - so it isn't completely forward looking


----------



## Duke of Marmalade

EmmDee said:


> VIX is Volatility IndeX - it is derived from the implied volatility measure from equity options. Increased implied volatility might imply more risk but it isn't a direct measure of how practitioners feel about risk. Implied volatility is partially derived from historic price volatility along with current option pricing - so it isn't completely forward looking


I beg to differ though it may be mere semantics.  I appreciate that VIX is not some sort of poll of how practitioners “feel” about current risks.  It is more tangible than that, it is how they price the risk.
Like all market prices it is *completely* about future prospects, albeit informed by the past.  Just as the ante post odds on a horse race will take into account past form, they are still 100% about the outcome of the future event.


----------



## Allpartied

RobFer said:


> I would imagine they are a good place to dump money when equities are expensive but now the stock markets is declining so it's surely the wrong time to be buying prize bonds or any low risk assets.


No-one knows if equities are cheap or expensive, right now.   The nature of equities is that they can fall and continue falling till they reach zero. Remember the blue chip Irish banks? 
If you have a sum of money and you don't want it to depreciate, putting it in Prize Bonds is reasonable. There is a small chance of increasing your money and no risk of losing any.  Plus you don't have to pay someone, as you do in equity funds, for the privilege.


----------



## Mad Boy

Guys,
Just wondering if anyone has purchased prize bonds or their equivalent from any other country & what is their experience. I have heard the premium bonds in UK are much better option than Irish prize bonds as prizes are higher & there are more weekly prizes. The top prizes in the Irish prize bonds have lowered significantly in the last few years & there are a lot more bonds purchased so chances of winning are greatly reduced.


----------



## Archer1

Mad Boy said:


> Guys,
> Just wondering if anyone has purchased prize bonds or their equivalent from any other country & what is their experience. I have heard the premium bonds in UK are much better option than Irish prize bonds as prizes are higher & there are more weekly prizes. The top prizes in the Irish prize bonds have lowered significantly in the last few years & there are a lot more bonds purchased so chances of winning are greatly reduced.


It doesn't seem like you can download the purchase form at the moment.
I'd be curious to know if prize bonds in other European countries are attractive too??


----------



## STEINER

Other half has won €1,200 from 120k worth of prize bonds over 2 years approx.  Bought out of curiosity after reading this thread, a no brainer compared to deposit interest.


----------



## RedOnion

Mad Boy said:


> I have heard the premium bonds in UK are much better option than Irish prize bonds as prizes are higher & there are more weekly prizes.


GBP interest rates are higher than Euro Interest rates, so it's not surprising that premium bonds pay a higher rate.

Why would you expose yourself to currency risk?



Mad Boy said:


> & there are a lot more bonds purchased so chances of winning are greatly reduced


The prize fund is calculated as a set percentage of the total funds, so more prize bonds means more prizes. Less chance of winning big, but there are extra small prizes. The maths is all explained earlier in the thread.


----------



## Saavy99

STEINER said:


> Other half has won €1,200 from 120k worth of prize bonds over 2 years approx.  Bought out of curiosity after reading this thread, a no brainer compared to deposit interest.



That's really good, and it's all DIRT free too. Well done!!


----------



## Saavy99

Archer1 said:


> It doesn't seem like you can download the purchase form at the moment.
> I'd be curious to know if prize bonds in other European countries are attractive too??



I'm sure you must be resident in the UK to be eligible to purchase prize bonds, same as opening a bank account really.


----------



## Duke of Marmalade

STEINER said:


> Other half has won €1,200 from 120k worth of prize bonds over 2 years approx.  Bought out of curiosity after reading this thread, a no brainer compared to deposit interest.


The average outcome over the two years would have been c. €750.  I calculate that €1,200 would be in the top 6% of outcomes, so he mightn't be as lucky in future.  Better than deposits for sure.


----------



## PM9999

Saavy99 said:


> I'm sure you must be resident in the UK to be eligible to purchase prize bonds, same as opening a bank account really.



This is not the case. There is no restriction on Irish residents buying UK Premium Bonds. See https://www.nsandi.com/i-live-outside-uk-can-i-invest-with-nsi

From the link:

_If you live outside the UK, you should check whether local regulations permit you to hold Premium Bonds. For example, the US has strict gaming and lottery laws which mean that it may not be possible or practical to hold Premium Bonds while in the US.

If you are allowed to hold them, you will have to apply in the first instance by post. Once your holding has been set up you can register for our online and phone service._

I checked with the Irish Revenue some time ago. Buying UK bonds is fine and they treat UK Premium Bond prizes for Irish tax residents exactly the same way as Irish Prize Bond prizes - tax free.

It looks as if the block on downloading an application form is temporary and due to coronavirus. I would also guess that they are not currently processing any new paper applications using the forms available at UK Post Offices. From a pop up on the NS&I entry page:

_Our phone and postal service is limited and experiencing delays during the coronavirus outbreak, as we’re working with much smaller teams. We’re asking our customers to do everything they can online. This will help us keep our teams available to help those who need us the most_.

You would be OK to purchase bonds if you already have a working online/phone account, but new applications from overseas (which must be written applications) seem to be on hold for the moment.


----------



## Saavy99

Oh that's great news, I have lump sum sitting in UK current account earning nothing. I will look into putting it into the prize bonds.


----------



## Duke of Marmalade

PM9999 said:


> This is not the case. There is no restriction on Irish residents buying UK Premium Bonds. See https://www.nsandi.com/i-live-outside-uk-can-i-invest-with-nsi
> 
> From the link:
> 
> _If you live outside the UK, you should check whether local regulations permit you to hold Premium Bonds. For example, the US has strict gaming and lottery laws which mean that it may not be possible or practical to hold Premium Bonds while in the US.
> 
> If you are allowed to hold them, you will have to apply in the first instance by post. Once your holding has been set up you can register for our online and phone service._
> 
> I checked with the Irish Revenue some time ago. Buying UK bonds is fine and they treat UK Premium Bond prizes for Irish tax residents exactly the same way as Irish Prize Bond prizes - tax free.
> 
> It looks as if the block on downloading an application form is temporary and due to coronavirus. I would also guess that they are not currently processing any new paper applications using the forms available at UK Post Offices. From a pop up on the NS&I entry page:
> 
> _Our phone and postal service is limited and experiencing delays during the coronavirus outbreak, as we’re working with much smaller teams. We’re asking our customers to do everything they can online. This will help us keep our teams available to help those who need us the most_.
> 
> You would be OK to purchase bonds if you already have a working online/phone account, but new applications from overseas (which must be written applications) seem to be on hold for the moment.


I never knew that!
Limit is £50k per individual (vs €250k)
The overall payout is 1.4% vs 0.5% (reflecting different interest rate environment)
The distribution is better with 1.2% being paid in £25 prizes
So let us compare £100k Premium Bonds vs €100k Prize Bonds
Premium:  average 48 prizes of £25 p.a.
Prize: average of 7 prizes of €50 p.a.
So Premium Bonds offer both a higher expectation and a lower relative standard deviation of returns (14% vs 38%)

The exchange rate risk for an Irish resident has already been mentioned but if you have sterling liabilities or if you would like to diversify a bit the risk of a Euro wobble then Prize Bonds look attractive.


----------



## Duke of Marmalade

Saavy99 said:


> Oh that's great news, I have lump sum sitting in UK current account earning nothing. I will look into putting it into the prize bonds.


I'm in the same boat, have been for years.  I could stretch to the max £100k which means that over the last few years I have left a bit on the table.  But it seems we have to wait for the coronavirus thing to blow over to get in.


----------



## Duke of Marmalade

Duke of Marmalade said:


> I'm in the same boat, have been for years.  I could stretch to the max £100k which means that over the last few years I have left a bit on the table.  But it seems we have to wait for the coronavirus thing to blow over to get in.


I decided to give it a try over the phone. About a 30 minute queue but the good news is that I now have a Premium Bond account   Took all the details over the phone, especially my PPSN.  The conversation was awkward, she asked was the Republic of Ireland in the UK, apologising for asking!


----------



## Saavy99

What's the number Duke?


----------



## Duke of Marmalade

Saavy99 said:


> What's the number Duke?


0044 1253 832 007  open till 10 tonight

My wife tried to open one after me (not allowed joint accounts)
They said that she had to apply by post and did she want an application form sent to her.  She said they had processed me over the phone and so they allowed her to do the same.


----------



## Manuel

According to the nsandi.com website:

"Bonds can only be purchased online or by phone using a personal debit card issued by a UK bank or building society."

Duke, have you purchased bonds since you opened your account? If so, how did you purchase them?

Thanks.


----------



## Duke of Marmalade

Manuel said:


> According to the nsandi.com website:
> 
> "Bonds can only be purchased online or by phone using a personal debit card issued by a UK bank or building society."
> 
> Duke, have you purchased bonds since you opened your account? If so, how did you purchase them?
> 
> Thanks.


Manuel,
I have my roots in the North so yes I do have a NI Ulster Bank Debit Card.


----------



## Lisboa

Duke of Marmalade said:


> The exchange rate risk for an Irish resident has already been mentioned but if you have sterling liabilities or if you would like to diversify a bit the risk of a Euro wobble then Prize Bonds look attractive.



Was the exchange rate a factor in your decision to purchase sterling Premium Bonds? As in do you envisage not only winning bond prizes, but also making profit through currency exchange rate?


----------



## Duke of Marmalade

Lisboa said:


> Was the exchange rate a factor in your decision to purchase sterling Premium Bonds? As in do you envisage not only winning bond prizes, but also making profit through currency exchange rate?


As mentioned before I have Northern roots and therefore a level of expenditure in sterling.  I also took out a "hedge" when it looked like Greece might sink the euro. I have therefore kept a sterling account partly as a hedge against total euro meltdown and also for future sterling expenditure.  Up till now I have kept that sterling hedge in a current account.  I have now been able to transfer some of that hedge to 1.4% earning Premium Bonds.  So the exchange rate was irrelevant.  For Irish folk without these circumstances £ Premium Bonds probably do not make much investment sense.


----------



## creditworthy

Hi , I am wondering how , if possible, to purchase more than 10k Prize Bonds  or Sate Savings online ( AIB   daily max transfer limit is 10k ) so that doesnt seem to be an option.  Bank draft and ovrr the vounter purchase  might be the easiest way , as Ive done before. Thank you.


----------



## Freelance

creditworthy said:


> Hi , I am wondering how , if possible, to purchase more than 10k Prize Bonds  or Sate Savings online ( AIB   daily max transfer limit is 10k ) so that doesnt seem to be an option.  Bank draft and ovrr the vounter purchase  might be the easiest way , as Ive done before. Thank you.



I’ve seen this discussed elsewhere.  So far as I know your options are:
1. Bank Draft or Personal Cheque (Some banks are slow to issue bank drafts in favour of other financial institutions, so this could be an issue)
2. Use an Ulster Bank or certain other Visa Debit cards as these have a higher daily limit
3. Multiple daily purchases of €10k each, if this is AIB’s daily Debit card limit

Best of luck


----------



## creditworthy

Thank you for your reply .


----------



## Navin Johnson

I just rang and tried to open an account...they said you have to post your application in....and you MUST provide a cheque to buy your first Premium Bonds....a cheque ....
also the link is down for getting the application form....found it here:


			https://www.nsandi.com/files/asset/pdf/premium-bonds-application-form.pdf
		


I will try the sales line tomorrow they might be more helpful


----------



## Duke of Marmalade

Navin Johnson said:


> I just rang and tried to open an account...they said you have to post your application in....and you MUST provide a cheque to buy your first Premium Bonds....a cheque ....
> also the link is down for getting the application form....found it here:
> 
> 
> https://www.nsandi.com/files/asset/pdf/premium-bonds-application-form.pdf
> 
> 
> 
> I will try the sales line tomorrow they might be more helpful


I have my Premium Bonds up and running.  Did it by phone.  I had a UB NI £ bank account.  It took a bit of an effort as my first attempt failed at the last hurdle when I discovered my debit card was out of date.  On my second attempt they said I had to apply by post.  I told them that was most perplexing as the day before I was able to almost complete the process by phone.  They relented and the process was concluded over the phone.  Maybe you could try reasoning with them arguing that the RoI post was extremely unreliable these days (Covid).  Unpatriotic I know.


----------



## Navin Johnson

Duke of Marmalade said:


> I have my Premium Bonds up and running.  Did it by phone.  I had a UB NI £ bank account.  It took a bit of an effort as my first attempt failed at the last hurdle when I discovered my debit card was out of date.  On my second attempt they said I had to apply by post.  I told them that was most perplexing as the day before I was able to almost complete the process by phone.  They relented and the process was concluded over the phone.  Maybe you could try reasoning with them arguing that the RoI post was extremely unreliable these days (Covid).  Unpatriotic I know.



Lol
Thanks for the info...
I did feel the person on the call couldn't be bothered...Maybe having a bad day....


----------



## Lisboa

Duke of Marmalade said:


> I have my Premium Bonds up and running.



Nice! How much did you invest if you don't mind me asking? I see they have the million prize in every monthly draw, as opposed to the ROI twice a year. Best of luck.


----------



## Duke of Marmalade

Lisboa said:


> Nice! How much did you invest if you don't mind me asking? I see they have the million prize in every monthly draw, as opposed to the ROI twice a year. Best of luck.


I'll send you a PM.


----------



## Duke of Marmalade

I attach the spreadsheet which I PM'd to _Lisboa_
This is where I calculated the 1.2% p.a. return in £25s.


----------



## Archer1

My sister lives in UK and said she'll pay for the premium bonds through her account. Should I still ring them to get an application form for non residents for them assuming I need to sign the form? My sister knows nothing about this kind of thing!


----------



## Archer1

Duke of Marmalade said:


> I'll send you a PM.


Would you mind telling me also. I've taken out Irish solidarity bonds and prize bonds. Really want to do the UK bonds as well but would be interested to know what a good initial investment would be. Thank you.


----------



## Navin Johnson

Navin Johnson said:


> Lol
> Thanks for the info...
> I did feel the person on the call couldn't be bothered...Maybe having a bad day....


So i rang the premium bonds people this am, took option 2, premium bonds, didn't mention that I was calling from Ireland, went through the whole process easy peasy the only potential issue was the uk bank account, but sure revolut solved that problem 
thanks @Duke of Marmalade for the previous info.


----------



## BusinessFailure

@Navin Johnson Did they not ask you for your address?


----------



## Navin Johnson

BusinessFailure said:


> @Navin Johnson Did they not ask you for your address?


Yes they asked for my address but no problems


----------



## Bocking14

I had Premium Bonds, purchased when living in the UK and attempted to buy more when I returned to Ireland but it was not permitted.

That was in the mid-1990s though so perhaps the rules have changed since then?


----------



## Duke of Marmalade

They're a bit confused about our status.  They asked me was Dublin (my current residence) in the UK.  I assured them it wasn't.  However, my personal details have finished up as being "born in Belfast, Republic of Ireland" and my telephone number as +44 00353 xx xxxxxxx 


			
				NS&I said:
			
		

> *Tax details*
> City of birth
> BELFAST
> Country of birth
> Republic of Ireland
> Tax country
> Republic of Ireland


----------



## Navin Johnson

Sent off my proof of address today....credit card statement...

Clearly says Dublin, Ireland....

So I'll confirm...


----------



## Navin Johnson

Navin Johnson said:


> Sent off my proof of address today....credit card statement...
> 
> Clearly says Dublin, Ireland....
> 
> So I'll confirm...


here is a screenshot  Address


----------



## Duke of Marmalade

Duke of Marmalade said:


> They're a bit confused about our status.  They asked me was Dublin (my current residence) in the UK.  I assured them it wasn't.  However, my personal details have finished up as being "born in Belfast, Republic of Ireland" and my telephone number as +44 00353 xx xxxxxxx


Won £75 (3 x £25) in my first monthly Premium Bond draw.  That's a run rate of 1.8% p.a. on my £50k which is ahead of my expected run rate in £25 wins of 1.2%.
The bad news is that I have had a really bad run on my weekly Prize Bond draw which I reckon has now passed the 1 in a 100 possibility.  The problem is that each Friday it is odds on to extend the losing run - the law of averages does not mean that I am due a win


----------



## Saavy99

Purchased €53000 worth of An Post Prize Bonds in May. I have since won €200. I'm impressed.


----------



## podgerodge

Well done you. I have 3 times that since October and only got 200! Blasted statistics!


----------



## podgerodge

Speaking of which, statistically is it better to have different tranches of these? I know that they all have equal chances, but is there a secondary statistical point that a spread of numbers is better?


----------



## Saavy99

podgerodge said:


> Speaking of which, statistically is it better to have different tranches of these? I know that they all have equal chances, but is there a secondary statistical point that a spread of numbers is better?



I was thinking about that. PTSB will only let me spend €2500 online in total every day so I bought mine in tranches over the course of a couple of months. In total I have 27 bonds containing a spread of different number.
I will keep thread updated as my winnings continue to accumulate throughout the year


----------



## Duke of Marmalade

podgerodge said:


> Speaking of which, statistically is it better to have different tranches of these? I know that they all have equal chances, but is there a secondary statistical point that a spread of numbers is better?


The straight answer is No.


----------



## podgerodge

Thanks Duke. What about the wooly answer, don't they talk about stats with roulette colours and numbers and even/odd etc. If you 'divided' all bonds into tranches of whatever, wouldn't it be statistically arguable that the same tranches would be unlikely to come up more often than others. Happy for you to tell me I'm talking nonsense!


----------



## Duke of Marmalade

podgerodge said:


> Thanks Duke. What about the wooly answer, don't they talk about stats with roulette colours and numbers and even/odd etc. If you 'divided' all bonds into tranches of whatever, wouldn't it be statistically arguable that the same tranches would be unlikely to come up more often than others. Happy for you to tell me I'm talking nonsense!


Roulette is a good example.  Manque represents the numbers 1 to 18.  Clearly a concentrated tranche.  Odd represents 18 numbers spread evenly over the 36.  Red is yet another "random" collection of 18 numbers.  Imagine you have a running bet on Manque, Odd or Red.  Your outlook is exactly the same.  If offered the choice you would have no rational basis for making that choice.
The long run statistical distribution of any of these three is the same bell curve centred on 50% (ignoring zeroes).  There is no secondary statistical differentiator.  Put another way the Roulette Wheel doesn't care what order the numbers are displayed on the Roulette Table.


----------



## podgerodge

Thanks Duke for taking the time to explain that.


----------



## SPC100

But is there any bias in the selection system/ algorithm used by prize bonds. Creating a truly random selection process is hard.


----------



## SPC100

Duke of Marmalade said:


> I never knew that!
> Limit is £50k per individual (vs €250k)
> The overall payout is 1.4% vs 0.5% (reflecting different interest rate environment)
> The distribution is better with 1.2% being paid in £25 prizes
> So let us compare £100k Premium Bonds vs €100k Prize Bonds
> Premium:  average 48 prizes of £25 p.a.
> Prize: average of 7 prizes of €50 p.a.
> So Premium Bonds offer both a higher expectation and a lower relative standard deviation of returns (14% vs 38%)
> 
> The exchange rate risk for an Irish resident has already been mentioned but if you have sterling liabilities or if you would like to diversify a bit the risk of a Euro wobble then Prize Bonds look attractive.



This post should probably be split and put as  a key post.


----------



## Duke of Marmalade

SPC100 said:


> But is there any bias in the selection system/ algorithm used by prize bonds. Creating a truly random selection process is hard.


Oh, I don't think so.  And if there was some bias it is impossible to know whether it favours a concentrated exposure or a spread one.


----------



## MugsGame

Duke of Marmalade said:


> And if there was some bias it is impossible to know whether it favours a concentrated exposure or a spread one.



I agree a bias is extremely unlikely. But I did previously suggest a method for investigating this:



MugsGame said:


> The winning prize bonds numbers are published for  each draw. Do an FOI request to get  the PBs entered in each draw, and then run some statistical tests to check the distribution is as expected.
> 
> This might not rule out very infrequent prize allocation errors, but should rule out significant problems or anything nefarious. Even PBs wrongly omitted from draws should be detectable with some assumptions (PBs are allocated in sequence so related PBs should enter the pool together, and PBs should not leave and re-enter the pool frequently).


----------



## Freelance

podgerodge said:


> Speaking of which, statistically is it better to have different tranches of these? I know that they all have equal chances, but is there a secondary statistical point that a spread of numbers is better?



No


----------



## EmmDee

podgerodge said:


> Thanks Duke. What about the wooly answer, don't they talk about stats with roulette colours and numbers and even/odd etc. If you 'divided' all bonds into tranches of whatever, wouldn't it be statistically arguable that the same tranches would be unlikely to come up more often than others. Happy for you to tell me I'm talking nonsense!



Assuming there is no bias in the random selection....

There is no statistical reason that having any combination of numbers would give an advantage. Our minds are naturally bad at probability - they look for patterns - and casinos and bookies take advantage of that. For discreet events (each spin of the roulette wheel or each drawing of the prize bonds) previous events have zero impact.

This is why casinos display the history of the last 10 spins or so. They know that when people see that black has come up for the last 3 or 4 times, there will be an overweight betting on red - when another black is just as likely. That imbalance over time gives the house an edge.

Picking 1, 2, 3, 4, 5, 6 is just as likely to win the Lotto as any other combination. If you win the Lotto this week, you have the exact same probability of winning it next week.

Likewise, it doesn't matter if your Prize Bond numbers are in sequence or spread all over the place - you have the exact same probability of winning


----------



## Early Riser

Over the years I have had occasion to cash in my Prize Bond investments and later re-invest a number of times. I did not keep a record but it was my distinct impression that after each re-investment I had fairly frequent (if small) wins for a period of maybe 12 months or so, but then they always trailed off considerably. I know there is no basis in probability for this. Maybe it is a psychological distortion. Anyone with similar experiences or impressions?


----------



## SparkRite

100% agree with the above. My impression also, over the years of owning bonds.
I have 45K in three tranches for over a year and not even a sniff of a prize.

Time to cash in and reinvest.


----------



## Duke of Marmalade

SparkRite said:


> 100% agree with the above. My impression also, over the years of owning bonds.
> I have 45K in three tranches for over a year and not even a sniff of a prize.
> 
> Time to cash in and reinvest.


I reckon you should have had an average of 3 prizes.  The probability of 0 prizes is 5%.  Not impossible, but rather unlucky.

Maybe I am a gullible soul, but it seems to me to be a conspiracy theory of the utmost improbable that the draw would be fiddled to suit any constituency such as more recent entrants.

Having said that, my <1% run continued last Friday, so could it be there is a discrimination against the aristocracy?


----------



## MugsGame

EmmDee said:


> Picking 1, 2, 3, 4, 5, 6 is just as likely to win the Lotto as any other combination. If you win the Lotto this week, you have the exact same probability of winning it next week.



There is a slight complication with the Lotto if you are entering multiple sets of numbers. No individual set of numbers is more likely, but  given match 4 & match 5 wins, it make sense to only change one digit between selections, as this increases the number of combinations you can cover. Not relevant to most entrants, but certainly exploited by syndicates who tried to "buy" a win.


----------



## Duke of Marmalade

EmmDee said:


> This is why casinos display the history of the last 10 spins or so.


  I haven't been in a PaddyPower shop since early March but I was always bemused by their regular lotto and roulette plays.  The screens "helpfully" keep the punters posted on the numbers that are "hot" and those which are "not".  It smugly amuses me to reflect that I know better, but then I start to think "and so does PaddyPower".  The display of this information can only be targeted at those who erroneously think that it does matter -  are we not veering towards offences against the trade descriptions Act or some such deception?



> Picking 1, 2, 3, 4, 5, 6 is just as likely to win the Lotto as any other combination. If you win the Lotto this week, you have the exact same probability of winning it next week.


  Absolutely, but the big further complication is that the chances of sharing are greatly influenced by your choice of numbers.  Avoid birthdays.  And avoid picking something like 1,2,3,4,5,6   Because there is likely to be maybe a dozen such guesses.


----------



## Duke of Marmalade

Duke of Marmalade said:


> Avoid birthdays.


I've been thinking about that.  If we imagine the populace consists of Birthday Suckers who chose their numbers from 1 to 31 and Smart Asses who chose their numbers from 32 to 47 there would have to be more than 100 times more of the former than the latter for my advice to be correct.

There is an Uncertainty Principle at work here.  Because if you could somehow work out the least popular choice, for example if detailed stats were made available, the Smart Asses would make that the most popular choice


----------



## SparkRite

As a sort of addendum to my post above, in 2014 I had just shy of 100K 'invested'.
For the first six months or so hardly a Friday went by without a win of €50, the odd time 2 X €50.
Overall about €150 pm if I remember correctly, but I do know that these prizes started to dry up somewhat
as my 'luck' dwindled..........
Anyway I withdrew the lot as I needed the funds and last year stuck in the 45K.
Now I know they have been slowly, but surely, decreasing the number of prizes, but I have to admit I am
somewhat dismayed that my 'luck' has deserted me totally.
Only for bad luck I'd have none at all.


----------



## DublinHead54

Is there a way to register to purchase Prize Bonds Online? I can only see a downloadable form and I don't have access to a printer currently due to WFH and it being 2020. Perhaps the forms are available at the post office or somewhere?


----------



## SparkRite

First purchase AFAIK must be made via written forms and after validation subsequent purchases can be made online.

Forms are available at PO's.


----------



## Saavy99

I bought all mine online a few months back however,  I already had a savings bond with them so they had all my details to hand.


----------



## Saavy99

I win another €50 today..now I'm tempted to buy more


----------



## SparkRite

Well done @Saavy99 !

Don't even bother asking how I did.


----------



## Saavy99

SparkRite said:


> Well done @Saavy99 !
> 
> Don't even bother asking how I did.


----------



## Duke of Marmalade

Saavy99 said:


> I win another €50 today..now I'm tempted to buy more


At last my losing run ended, €50 today.  The run was over 100/1 against.


----------



## Freelance

SparkRite said:


> As a sort of addendum to my post above, in 2014 I had just shy of 100K 'invested'.
> For the first six months or so hardly a Friday went by without a win of €50, the odd time 2 X €50.
> Overall about €150 pm if I remember correctly, but I do know that these prizes started to dry up somewhat
> as my 'luck' dwindled..........
> Anyway I withdrew the lot as I needed the funds and last year stuck in the 45K.
> *Now I know they have been slowly, but surely, decreasing the number of prizes, *but I have to admit I am
> somewhat dismayed that my 'luck' has deserted me totally.
> Only for bad luck I'd have none at all.



The number of €50 prizes is a factor of the interest rate applying to Prize Bonds.  In early 2015 the interest rate was 1.6%. Today it is .5%. So there has been a very significant reduction in the number of prizes available.


----------



## Early Riser

Freelance said:


> The number of €50 prizes is a factor of the interest rate applying to Prize Bonds.  In early 2015 the interest rate was 1.6%. Today it is .5%. So there has been a very significant reduction in the number of prizes available.



I have just checked my winnings on a €50K investment.

2016    €400 (8*50)
2017    €300 (6*50)
2018    €100 (2*50)
2019    €150 (3*50)
2020     0000000 to date!


----------



## podgerodge

All, my mother gave me a prize bond (2 units) for £10 (pounds) from the 1960's I would say, asking me to get rid of it as she is clearing things out.  So will get €12.50 I presume, but it struck me that this £10 would have been worth significantly more when it was purchased.


----------



## Saavy99

SparkRite said:


> Well done @Saavy99 !
> 
> Don't even bother asking how I did.



Nothing for me today a big ZERO 

How about you Sparkrite


----------



## Balfour

Hi

Does the value of your prize bonds depreciate over time, i.e. if one was to buy 5k worth of prize bonds today, will they be still worth 5k in 10 years time.


----------



## EmmDee

Balfour said:


> Hi
> 
> Does the value of your prize bonds depreciate over time, i.e. if one was to buy 5k worth of prize bonds today, will they be still worth 5k in 10 years time.



Yes.


----------



## Balfour

EmmDee said:


> Yes.



Thanks 

How much by?


----------



## EmmDee

Balfour said:


> Thanks
> 
> How much by?



Apologies - I was answering this question.... "if one was to buy 5k worth of prize bonds today, will they be still worth 5k in 10 years time"

The face value of the bonds remain. Buy €5k now - in 10 years time you cash them in, you'll get €5k. Of course the value of €5k will have reduced over time due to inflation. But in absolute cash terms, they don't depreciate


----------



## SparkRite

Saavy99 said:


> Nothing for me today a big ZERO
> 
> How about you Sparkrite



YAY !! AT LONG LAST !! 

Aha, Gotcha..........
unPleased to say I am continuing my unbroken run of zilch, nada, nowt...........
Welcome to the club BTW.


----------



## time to plan

Apologies if this question has already been answered.

I'm saving a rainy day fund and then savings for other purposed over a couple of years with regular monthly savings, but I may need the money back at short-ish notice as I'm self-employed and work could dry up. So rather than put it in our 0% savings account or open a 0.25% (pre-DIRT) regular savings account, it may as well go in prize bonds.

If I need to show evidence to a bank of regular saving for a mortgage (currently have a mortgage but may want to "trade up" in a couple of years), will the bank care that it's gone into prize bonds?

Thanks.


----------



## theresa1

I tried last week online to purchase Prize Bonds (already own some) and just a few minutes ago. On both attempts I got my one-time Passcode for Verified by Visa and entered it. I waited a few minutes and then "Technical error" came up on my screen. I'm using Google Chrome. Anyone else try lately and have issues?


----------



## theresa1

Just tried with Microsoft Edge - no problem.


----------



## Monbretia

I got something similar, went to the end of the process and when I pressed Exit it said error of some sor.  I rang them as I tried it twice and both looked perfect until the very end, anyway they said the purchases are actually on the system and they will get around to processing them basically.  I did those last Friday and the money has still not come out of my account and no confirmation email either, I expected it to be quicker like most online purchases.

I will wait and see if it actually does work as intended, I have no other option for buying them, I actually got the debit card specially for this reason, they don't accept bank transfers and even if I wanted to pay €10 (I think that is cost now) for a draft my bank won't issue one payable to An Post!


----------



## theresa1

Any cheques or bank transfers should be made payable to NTMA State Savings. That's odd with the bank over the draft but as just stated you don't make the cheque/draft out to An Post.

I doubt those purchases will  ever go through. You can do monthly direct debit but maximum per month is €1,000.


----------



## RedOnion

theresa1 said:


> That's odd with the bank over the draft


Pretty standard. A bank draft made payable to another financial institution basically becomes a bearer instrument. Anyone can use it. So for both security and anti money laundering purposes, you can't get one.


----------



## theresa1

https://www.bankofireland.com/help-...ow-completing-online-bank-draft-request-form/ - Royal Bank of Scotland is ok with BOI?


----------



## Monbretia

Yes exactly the reason the bank won't do it, their explanation was if I dropped it outside the door anyone who found it could use it.

I know it's NTMA etc, just said An Post from habit   they weren't making it out to either of them anyway, suggested I go next door to the Credit Union!

I actually don't think the purchases I did are going to go through either, still nothing has happened  with them, will ring them again next week to see what's the story.


----------



## Saavy99

SparkRite said:


> YAY !! AT LONG LAST !!
> 
> Aha, Gotcha..........
> unPleased to say I am continuing my unbroken run of zilch, nada, nowt...........
> Welcome to the club BTW.



Pleased to say. Just won another €50, hope you can say similiar, I have won €250 since I started purchasing last march. All €50 wins so far..Hoping for bigger wins to start rolling in shortly


----------



## SparkRite

Well done @Saavy99 , I'm seriously beginning to suspect my bonds are not being included in any draw. 
Again another big fat zero.


----------



## STEINER

Won €400 last year, €350 won so far in 2020. Hoping to get another win or two before year end. Only getting individual €50 wins.


----------



## Saavy99

Yes, I'm probably just having a bit of luck.   I'm presently using the bonds as a temporary parking place for funds as I don't feel particulary confident using any other investment strategy at the moment.


----------



## Saavy99

STEINER said:


> Won €400 last year, €350 won so far in 2020. Hoping to get another win or two before year end. Only getting individual €50 wins.



How much have you invested if you don't mind saying so.


----------



## STEINER

Saavy99 said:


> How much have you invested if you don't mind saying so.


€130k currently. 2 main batches €113k. 5 smaller batches making up the balance with some spare funds.


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## Saavy99

STEINER said:


> €130k currently. 2 main batches €113k. 5 smaller batches making up the balance with some spare funds.



It's alot of cash tied up. Yes, you would want to be winning 4 to 500 euro a year to at least keep up with inflation.


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## Lisboa

NS&I are cutting the UK Premium Bonds “prize-fund rate” from 1.4% to 1% from December.

https://www.theguardian.com/money/2...s-prizes-direct-saver-investment-account-isas


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## Duke of Marmalade

Lisboa said:


> NS&I are cutting the UK Premium Bonds “prize-fund rate” from 1.4% to 1% from December.
> 
> https://www.theguardian.com/money/2...s-prizes-direct-saver-investment-account-isas


Oh dear    After all that effort to buy £50k back in July.  It was looking good; 3 x £25 in August, 5 x £25 in September, that is an annualised run rate of 2.4% p.a. against my expected rate of 1.2% p.a. (I ignore the possibility of prizes in excess of £25 in these calculations)  My expected run rate will now reduce to 0.85% p.a.  Still better than elsewhere.


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## Mad Boy

Hi Duke of Marmalade, are the chances of winning on Premium Bonds better than winning on Irish Prize Bonds. I have approx 10k in savings but the interest rates make no sense to keep in the bank. Given the chances of winning on Prize Bonds are very slim I would be relying on luck more than anything but I might give the Premium Bonds a shot. Is it easy enough to purchase from the UK? What do I need to get started?


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## Duke of Marmalade

Mad Boy said:


> Hi Duke of Marmalade, are the chances of winning on Premium Bonds better than winning on Irish Prize Bonds. I have approx 10k in savings but the interest rates make no sense to keep in the bank. Given the chances of winning on Prize Bonds are very slim I would be relying on luck more than anything but I might give the Premium Bonds a shot. Is it easy enough to purchase from the UK? What do I need to get started?


Premium Bonds pay 0.85% in £25 units.  So with 10k you might expect just over 3 prizes per year but varying between say 1 and 5.
Prize Bonds pay 0.35% in €50 units so you should expect under 1 prize per year with little chance of more than 2.

As always I am ignoring the remote chances of hitting the jackpot, but maybe that can satiate your Lotto fixation, if you have one

Applying for Premium Bonds is a bit of an effort but it can be done on line.


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## Ryan

What does today’s NTMA acnnouncement mean for prize bonds?


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## Freelance

Ryan said:


> What does today’s NTMA acnnouncement mean for prize bonds?



Replied to your identical post in the New State Savings Rates thread.


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## Duke of Marmalade

Bad news!  The return in €50 prizes has been reduced from c. 0.35% p.a. to c. 0.25% p.a.  It means that a couple with the maximum €500k can expect a €50 prize once every 2 weeks.


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## odyssey06

Prize bonds are in the news again - featured on Liveline today. No Brendan this time.


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## STEINER

Ended up with 10 x €50 prizes  for 2020 for 130k.


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## pudds

odyssey06 said:


> Prize bonds are in the news again - featured on Liveline today. No Brendan this time.


.


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## SparkRite

STEINER said:


> Ended up with 10 x €50 prizes for 2020 for 130k


Ended up with 0 x €0 prizes for 2020 for 45k


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## Duke of Marmalade

STEINER said:


> Ended up with 10 x €50 prizes  for 2020 for 130k.


You would have expected on average 9.1 prizes.  You are spot on average as it is not physically possible to get 0.1 of a prize.  Your chances of 10 or more was 43%.  Under the new rules  you can expect on average 6.6 prizes in a year, with only a 14% chance of 10 or more.


			
				SparkRite said:
			
		

> Ended up with 0 x €0 prizes for 2020 for 45k


You would have expected 3.2 prizes with only a 4% chance of getting none.  You were unlucky; are you sure you had them for the full year?
Under new rules you can expect 2.2 prizes per year with 11% chance of no prizes.


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## Early Riser

SparkRite said:


> Ended up with 0 x €0 prizes for 2020 for 45k



Snap! 

Well, almost. Nearly €50K invested and zilch in the 12 months to the end of November, 2020. Cashed them in then. Not directly related to the lack of return, but it will be a consideration as regards re-investment.


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## SparkRite

Duke of Marmalade said:


> You would have expected 3.2 prizes with only a 4% chance of getting none.  You were unlucky; are you sure you had them for the full year?
> Under new rules you can expect 2.2 prizes per year with 11% chance of no prizes.


 Thanks for the maths, Duke. 
Actually have them for 18 months now and zero return.


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## Duke of Marmalade

SparkRite said:


> Thanks for the maths, Duke.
> Actually have them for 18 months now and zero return.


That is only a 1% chance.  I presume you don't back the gee gees. 
I had a long run of blank weeks last year which was a less than 1% chance but over the year I got a 0.33% return which is just below the expected 0.35%.  In 2019 I got precisely a 0.35% return.


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## SparkRite

Duke of Marmalade said:


> That is only a 1% chance. I presume you don't back the gee gees.



Indeed, I do not !
If it weren't for bad luck, I'd have no luck at all.

Actually about 6 years ago I had just shy of 100k in there and usually collected 3 - 4 €50's a month. Never anything higher.
Then they started their messing with the % payouts and it very rapidly went downhill from then.
I used to look forward to the Friday check, but don't even bother much now.


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## Ravima

The only plus, is that there is a _chance_ of a larger win than the €50. There's feck all in depositing in bank!


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## STEINER

[





Ravima said:


> The only plus, is that there is a _chance_ of a larger win than the €50...


Yes, one €500 win amongst a couple of €50 wins in 2021 would suffice.


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## SparkRite

So, here we are, almost 2 years with 45k 'invested' and not one prize.

So that certainly disproves the title.


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## Grizzly

I cashed in €100k of Prize Bonds and put it to better use helping out a family member. He is saving on loan interest. The few hundred Euro wins per annum were nice when I got the occasional cheque in the post. Now it's reinvested in Prize Bonds or sent to my bank.  Not the same.

I still have over €150k and very few wins. This month I got a €50 and a €100.  Very unusual.

Also switched €100k to the stock market and got a nice dividend of €1000 after tax in April with three more dividends (not as much) due over the next 3 quarters....

Grateful for what I have but all hard earned and need it to work for me also.....


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## Ryan

Are Prize Bonds still a good option? Have €55k in KBC to invest


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## ClubMan

Prize Bonds are not an investment.
They're a ticket for a raffle, with long odds on winning anything significant, that's redeemable at the nominal face value which will erode in real terms over time.
No harm in having a few (I do) but they shouldn't generally be a significant part of your overall "portfolio".

What is your investment timeframe, when will you need the money and for what?

Do you have any debts, especially non mortgage debts?
Paying them down may be a better idea/return.

Are you investing in a pension?
What's your overall financial/personal situation?


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## Ryan

Age 30, single, no debts, credit card paid in full every month. Currently renting and that’s not changing in the medium term . Earning just under €40k but that’s not enough to buy on my own 

I pay 2% of my salary into a pension, employer pays 8%, can increase this to 4%.
I hace €18k in an investment fund and the rest on deposit. The term investment perhaps wasn’t the right word


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## ClubMan

If you're saving for a house deposit then maybe something like Prize Bonds *is* suitable for your needs. You may win something and you're unlikely to get much extra on deposit. But it depends on your timeframe.


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## Ryan

It’s going to be a few years , really depends on how much I can increase my salary or mortgage rules change.Where else would you put a lump sum the way things are now.  There are 3/4 year state savings options too I noticed


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## Duke of Marmalade

Ryan said:


> Are Prize Bonds still a good option? Have €55k in KBC to invest


If you deposit this in  a notice deposit account with, say, BoI you will earn €16.50 p.a. subject to DIRT.

If you buy Prize Bonds then over the course of 1 year the following are your possibilities  (all returns tax free):
6% chance you will get ziddly squat
18% chance 1 prize of €50
24% chance 2 prizes worth €100
22% chance 3 prizes worth €150
15% chance 4 prizes worth €200
8% chance  5 prizes worth €250
7% chance more than this in €50 prizes
*In addition* you have the "€55 worth" of "lotto" chances of winning prizes up to €250k.

A tad better than bank deposits IMHO


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## ClubMan

Duke of Marmalade said:


> 6% chance you will get ziddly squat
> 18% chance 1 prize of €50
> 24% chance 2 prizes worth €100
> 22% chance 3 prizes worth €150
> 15% chance 4 prizes worth €200
> 8% chance  5 prizes worth €250
> 7% chance more than this in €50 prizes
> *In addition* you have the "€55 worth" of "lotto" chances of winning prizes up to €250k.


Can you explain how you arrived at the percentages above and what the "lotto" reference means please? Thanks.


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## ClubMan

Not sure if it was posted before but this is an interesting opinion/analysis...








						Money Smart • Are Prize Bonds for Prize Idiots?
					

How do prize bonds work? Are prize bonds a good investment?




					moneysmart.ie


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## Duke of Marmalade

ClubMan said:


> Can you explain how you arrived at the percentages above and what the "lotto" reference means please? Thanks.


I attach my spreadsheet which I hope is self explanatory.  I have changed the name from "lotto" wins to "super" wins.


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## ClubMan

Thanks @Duke of Marmalade - I'll have a read of that later.


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## Duke of Marmalade

ClubMan said:


> Not sure if it was posted before but this is an interesting opinion/analysis...
> 
> 
> 
> 
> 
> 
> 
> 
> Money Smart • Are Prize Bonds for Prize Idiots?
> 
> 
> How do prize bonds work? Are prize bonds a good investment?
> 
> 
> 
> 
> moneysmart.ie





			
				Money smart said:
			
		

> The odds of winning a prize (and thus earning ‘interest’) are pretty remote.


  For €55,000 the chances of winning some prize, albeit most likely a €50 prize but still beating the pants off deposits, are 94%.


> This gross 0.5% notional rate of return is skewed higher by the small number of very large prizes and is unrepresentative of probable returns.


Ignoring the prizes in excess of €50 the "notional" rate of return is 0.40%.


> It is therefore necessary to put in a fairly substantial investment, in excess of €10,000, to get a reasonable return within a reasonable period of time.


Well yes, €10k has a 60% chance of paying Nil.  The max joint holding of €500K has a 80% chance of earning more than 0.2% tax free.  To me it is a better option than bank deposits but obviously Money Smart would prefer you followed this advice:


			
				Money Smart said:
			
		

> Do you want to gain a better return without taking crazy risks? Call me on 01 276 0006 or 086 850 8577.


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## liam bourke

how do prize bonds work....
you need to have cash with state first of all?


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## Monbretia

liam bourke said:


> how do prize bonds work....
> you need to have cash with state first of all?


Yes you must buy them first, like buying a lottery ticket in some ways except you get your money back whether you win or lose!   They cost 6.25 each so you buy as many as you want, they are entered into regular draws and small chance of winning but better than nothing!  Then when you are sick of them or need the money you just apply to cash them in and get it back.


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## DirectDevil

AFAIK there was a maximum holding introduced a few years ago of €250,000.

I think that you can exceed the threshold as you are allowed to add winnings from bonds. e.g you hold €250K and win €1K. You may hold €251 K.

If only...............


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## Monbretia

Well yes there is a maximum holding but I assumed, maybe wrongly, that the poster wasn't going for the full whack


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## MugsGame

DirectDevil said:


> I think that you can exceed the threshold as you are allowed to add winnings from bonds. e.g you hold €250K and win €1K. You may hold €251 K.


That's correct, yes ...


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## ClubMan

liam bourke said:


> how do prize bonds work....
> you need to have cash with state first of all?


Surprisingly, they explain how they work here...





						Ireland State Savings - Prize Bonds | Products | State Savings
					

Be in with a chance to win, each and every week with thousands of Tax Free Prizes including a quarterly jackpot prize of €250,000




					www.statesavings.ie


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## ClubMan

Duke of Marmalade said:


> Ignoring the prizes in excess of €50 the "notional" rate of return is 0.40%.


0.35% according to the State Savings Prize Bonds FAQ.





						Ireland State Savings - Help & Support | State Savings
					

Browse and search our help articles, download an application for or a brochure




					www.statesavings.ie


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## Duke of Marmalade

ClubMan said:


> 0.35% according to the State Savings Prize Bonds FAQ.
> 
> 
> 
> 
> 
> Ireland State Savings - Help & Support | State Savings
> 
> 
> Browse and search our help articles, download an application for or a brochure
> 
> 
> 
> 
> www.statesavings.ie


I must have posted that before the last rate change.  The current percentage is .35% overall of which c. .25% is paid in €50 prizes.


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## ClubMan

No worries. I didn't realise that things had changed since you posted in early 2022.


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## joe sod

You would be better off just buying government bonds than these , the 10year irish government bond yield isnow  2.6% and this is likely to go alot higher as interest rates keep rising


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## ClubMan

joe sod said:


> You would be better off just buying government bonds than these , the 10year irish government bond yield isnow  2.6% and this is likely to go alot higher as interest rates keep rising


But, unless you buy a new issue (something that's probably not an option for a retail investor?), won't such expectations/projections be already factored into the market price for a bond so there's no free lunch here?


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## jpd

If you buy a Government Bond on the secondary market, the interest you earn is built-in at the time of purchase assuming you hold the bond until maturity.

So future rises in the interest rate will not increase the interest you earn at all and, if you have to sell the bond before maturity, you will probably make a capitial loss as the price will be below what you paid to buy it


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## joe sod

jpd said:


> If you buy a Government Bond on the secondary market, the interest you earn is built-in at the time of purchase assuming you hold the bond until maturity.
> 
> So future rises in the interest rate will not increase the interest you earn at all and, if you have to sell the bond before maturity, you will probably make a capitial loss as the price will be below what you paid to buy it


yes but its still a hell of a lot better than a prize bond, if you only buy a relatively short dated one not greater than 10 years, you dont have to worry about bond price fluctuations you just hold it to maturity, Yes interest rates will probably continue to rise so just gradually invest the money to take advantage of falling bond prices,  I'm just introducing government bonds to point out what a lousy deal prize bonds are


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## peemac

joe sod said:


> You would be better off just buying government bonds than these , the 10year irish government bond yield isnow  2.6% and this is likely to go alot higher as interest rates keep rising


Prize Bond prizes will increase in the next few months as the prize fund is based on interest rates


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## Marc

Two year Irish government bonds are currently yielding 1.952% assuming a marginal tax rate of 52% that’s 0.94%pa net of tax.

By contrast the prize bond fund is currently paying 0.35% but you won’t earn that rate unless you have a very large holding for an infinite period. So assume less than this in practice.

But the real issue is that inflation is currently running at or near 9%pa and interest rates are increasing around the world.

interest rates peaked in about 1990 and have been broadly falling ever since. That’s 30 odd years since we have had to deal with a period of rising interest rates and high inflation.

Some thoughts

Think of your mortgage like a bank account with a negative interest rate. As rates increase your mortgage gets more expensive. 

Many people have stretched their borrowings to the max based on the affordability of previously zero interest rates. 

So, even a small increase in mortgage rates will impact many households already stretched financially and even more so given higher energy costs.

Don’t think you can beat the bank. If you have cash lying around in deposit accounts or state savings think about knocking some off the debt. But try and keep your mortgage payment the same. 

That will accelerate the debt repayment.

Equally don’t be persuaded to invest in a unit linked insurance bond and keep your mortgage or other debt. 

The tax is 41% of the profit and it’s therefore highly unlikely that you would ever profit from this. 

Bond markets move inversely to interest rates so while we now see, for example, many US corporate bonds  now paying yields of more than 4% in order to get there the price of bonds has fallen sharply this year.

Deposit rates should creep up slightly but don’t expect miracles. A one year fixed deposit is typically only paying 0.05% currently.

Look out for new issues of state savings certificates at higher interest rates than currently available. Again don’t expect miracles but we should see new certificates coming out at higher rates in the future.

Annuity rates for pensions have shot up this year from albeit historically low levels.  We are monitoring this market extremely closely.


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## Duke of Marmalade

ClubMan said:


> No worries. I didn't realise that things had changed since you posted in early 2022.


Oops!  Yes that was a mistaken throwback to the previous rates.  On that same day I posted an accurate spreadsheet of the current position.


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