# Can someone tell me how prize bonds would be affected if the banks here go flop?



## Carra (30 Nov 2011)

Can someone tell me how prize bonds would be effected if the banks here go flop.

Thanks.

Carra


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## horusd (30 Nov 2011)

They are underwritten by the state...pretty safe (comparatively!) in these times. They are unrelated to banks.


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## frankmac (30 Nov 2011)

Would they be in the same category as post office bonds and certs?


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## Carra (1 Dec 2011)

Thank you for that information HORUSD

Carra


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## zen (1 Dec 2011)

I was onto the prize bonds company.  A month ago the lady told me that  they had just sold their 1 Billionth prize bond.........  

@6.25 per bond that is 6.25 Billion Eur.  A draw of a measly monthly million €does not even register.
I wonder is the government investing this money without telling anyone,  if I was a betting man I'd say that the prize bond money aint just  sitting about in a big pot idilly.


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## Lightning (1 Dec 2011)

zen said:


> if I was a betting man I'd say that the prize bond money aint just  sitting about in a big pot idilly.



The money from all State Savings products including Prize Bonds are used by the NTMA to fund the national debt. It can be viewed on the NTMA balance sheet on the NTMA website.


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## zen (2 Dec 2011)

CiaranT said:


> The money from all State Savings products including Prize Bonds are used by the NTMA to fund the national debt. It can be viewed on the NTMA balance sheet on the NTMA website.




Interesting..... so how safe are prize bond then really......


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## frankmac (2 Dec 2011)

So they are in the same category as post office bonds and certs


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## pudds (2 Dec 2011)

frankmac said:


> So they are in the same category as post office bonds and certs




indeed..... unfortunately.


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## the-madman (26 Dec 2011)

bumping this again. 

Does anyone have any in-depth details about this? 
Their webpage sufficiently cover up all the real interesting details.

For example:
How do they make their money to pay out the winners. 

They claim: http://www.prizebonds.ie/index.asp
Last month 30752 Prize Bond investors received EUR 3,391,600 in Tax free cash prizes.

3m+ per month is not bad, but I wonder where does the money come from? 

If i take the figure above about 1 billion sold bonds...

Do they take the approx 6,25 billion € and put them somewhere for interest? And If so, where and for how much and how save is it there? 

Little math
6 Billion / 1 year EZB 1% = 60 million - [(12*3.4million) =40.8M] they would be good and would have a slight profit.  If they get even more where is it and how save is it there?   Rabodirect doest take that much and is not AAA anymore 

or: 
Do they buy other country's bonds and refinance with the interest they get from this? (So they maybe even own Greece bonds?)  Then they probably wont have much space to maneuver on any Euro bailout negotiation.

or:
Wouldn't the government take such money first to pay off their own debts. 
If I'm not too wrong were talking about 116 Billion € debts. So 6b are just peanuts and wont get them too far but will open again the question where does the money for the winners come from?

Is it maybe nothing else that a pyramid system where the "losers" not winning at all and/or not withdrawing their money on time, have to pay the bill at the end (in 2019)?


And now about who is running this show:

"The Prize Bond Company Ltd. is a joint venture operated between An Post and FEXCO.

The company was set up in 1989 to operate the scheme for the Minister for Finance. The scheme is now operated on behalf of the National Treasury Management Agency (NTMA) which manages the national debt on behalf of the Minister for Finance. In 2009 the company submitted a successful tender to operate the scheme for a further 10 years until September 2019. 

An Post is responsible for the accounting, marketing and the conduct of the draw. The administration is carried out by FEXCO in Killorglin, Co.Kerry. "

So if a Ltd. is running it, how is anyone protected against them going into liquidation or walking away with the money ?   Because a a Ltd. is well ... limited (in hope and in liability) and what will happen after 2019?

If anyone is interested into the annual report 2010. 
http://www.prizebonds.ie/downloads/AnnualReport2010.pdf

I'm going to put these questions officially towards "The Prize Bond Company Ltd" and the "NTMA" and will see and put it here if they will respond to it.


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## camlin90 (26 Dec 2011)

> How do they make their money to pay out the winners.



The prize bond fund is used to finance the national debt.
In return, the NTMA pay interest at X% to the Prize Bond Company (rate = 3% currently I think) which is used to pay prizes.
Similar to Savings Bonds, Savings Certs etc on which the NTMA pay interest.


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## The_Banker (29 Dec 2011)

Prize bonds can be cashed in apparently. Obviously bonds in the 70s cost less than they do today.
Now, say I decide to cash in a bond I purchased in 1977 would I get the price that was paid for the bond in 77 (or its euro equivilent) or do I get todays price?

Also, I have some bonds in my mothers name, who has passed away. Do the bonds die with her or could I in theory claim a prize once I had the actual bond?

Also, how does one actually cash in a bond?

Just curious so if anyone can answer these questions I would be grateful.


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## STEINER (29 Dec 2011)

to cash in you fill out a repayment form and send it to them.

http://www.prizebonds.ie/about/faqs.html#Q8

you just get your original investment back, so 20 pounds worth bought in 1977 would give you back the equivalent in euro today.

The company don't know that your parent is deceased so if you sent away a repayment form, a cheque would issue in deceased name and that may or may not be awkward for you.  It is part of deceased estate so you may have to do the legal stuff.  That FAQS link above has good info re death of a prizebondholder.


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## Black Rock (29 Dec 2011)

*Prize Bonds are one of the NTMA products in the "State Savings" range*

*Prize Bonds are one of the NTMA products in the "State Savings" range*

Most of your questions are answered in an FAQ (pdf) on the NTMA website. 

The link is http://www.ntma.ie/PersonalSavings/personalSavingsIntro.php
And then choose FAQ link at the bottom of the page – 

http://www.ntma.ie/Publications/2011/FAQ_State_Savings.pdf

Excerpts from the NTMA website are paraphrased below – 


Ireland State Savings™ is the brand name used by the National Treasury Management Agency (NTMA) to describe the range of savings products offered by the State to personal savers. 

Prize Bonds are one of the products in the range of *Ireland State Savings* product range which include Savings Bonds, Savings Certificates, Instalments Savings, National Solidarity Bond and Deposit Accounts (Ordinary Deposit Account and Deposit Account Plus). 

At end September 2011 State Savings amounted to €13,875 million representing 12.1% of the national debt of €114,712 million.

When you place your money in State Savings you are placing your money directly with the Irish Government. The repayment of all State Savings money is a direct, unconditional obligation of the Government of Ireland.

Because your money is placed directly with the Irish Government 
-there is no upper limit on the amount of your money that the Government protects and 
-the Irish Government’s obligation to repay you does not have any expiry date.

Repayment of your money includes principal, interest and bonus payments if due, and in respect of Prize Bonds, cash prizes.

At end September 2011 State Savings accounted for 13.8% of the Irish savings market. The total value of the savings market was €100,398 million of which State Savings under the management of the NTMA amounted to €13,875 million or 13.8%. 

The remaining €86,5230 million are deposits from Irish private households (individuals acting in a personal capacity) on the balance sheet of all Irish resident credit institutions.

Over 2 million individuals hold one or more of the State Savings™ products.

The amount of money in each _State __Savings™ _product is as follows - 
*Outstandings as at end **Sept 2011*
*€ million*
€ 4,725............3 year Savings Bonds
€ 4,198............5½ year Savings Certificates
€ 470 .............6 year Instalment Savings
€ 541 .............4 -10 year National Solidarity Bond
€ 2,510 ..........Deposit A/c (incl. Savings Stamps)
€ 1,431 ..........Prize Bonds
*€13,875*

The value of Prize Bonds outstanding at end 2010 was €1,328 million and at end September 2011 was €1,431 million. Prize Bonds represent 10% of the total State Savings at end September.

The NTMA set the “interest rate” on Prize Bonds. It is currently set at 3% per annum of the value of prize bonds outstanding. 3% of €1,431m is €43m or €3.6 million per month in prize money. The prize money is paid by the NTMA to the Prize Bond Company for distribution to the prize winners who are drawn in a weekly draw which takes place every Friday.

There are almost 8,000 prize winners every week. 

An Post and the Prize Bond Company are agents of the National Treasury Management Agency (NTMA) in respect of the Ireland State Savings™ product range. Neither An Post nor the Prize Bond Company has ever retained or managed any Ireland State Savings™ money.

All Ireland State Savings™ money is placed directly with the Government under the management of the National Treasury Management Agency (NTMA). This has always been the situation and no change has taken place – both An Post and the Prize Bond Company are conduits that collect State Savings™ money and pass it directly to the Government. 

The obligation to repay State Savings™ money is an unconditional obligation of the Irish Government and not an obligation of it’s agents (An Post and the Prize Bond Company).


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