# Key Post: Prize Bonds as a place to keep some money?



## Piaras (23 Jun 2003)

I was considering putting some money into prize bonds. They appear to be a risk free way of putting money aside (www.prizebonds.ie) but it's not clear what my chances are of winning. If the odds were reasonable I'd seriously consider it given the poor interest I get now in the bank.

What are my chances?

Any thoughts?


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## rainyday (23 Jun 2003)

*Re: Prize Bonds as a place to keep some money?*

Hi Piaras - Don't forget to consider the risk of inflation eating away at the value of your money. While it may not drop in numerical terms, it is likely that it will drop in real terms (i.e. purchasing power).


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## ClubMan (24 Jun 2003)

*Re: Prize Bonds as a place to keep some money?*

There's no harm in having a little money in Prize Bonds but they are more a refundable ticket for a lottery than a real investment should not represent a large percentage of your overall wealth/portfolio. As _rainyday_ says the nominal value is guaranteed and you may win a prize from the c. 2.75% p.a. of the fund value redistributed in prize money but the real value of your money will be eroded by inflation. They are definitely a better option that playing the Lotto.


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## Brendan Burgess (25 Jun 2003)

*Prize Bonds as short term home*

I have a lump sum (c. 85k) recently liquidated from various investments, which will go into a new house which should reach completion in about 5 - 6 weeks.

Would prize bonds be a sensible short term home?


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## rainyday (25 Jun 2003)

*Re: Prize Bonds as short term home*

Note that the prize bonds 'cashing out' period can be a little slow (e.g. 1-2 weeks) - I wouldn't want to be depending on getting my hands on the hard cash in a matter of days.


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## SPC100 (1 Jul 2003)

*Re: Prize Bonds for short term*

It is worth noting that from the day you buy your bond, you must allow 3 weeks before it can participate in a draw. So if you are thinking really short term there is no point.

They calculate their prizes based on 2.75% of the total amount of money. Currently there are about 55 million individual bond( at 6.25 Euro each) in the fund.

As there are some very big prizes - I assume a typical investor won't see a return of 2.75 per cent out of it. The longer you leave it in - I guess the better your "chance"

I had two bonds (~13 Euro) for the last 10 years or so and recently got a win of 75 Euro. I was happy enough with that return so I reinvested the entire win.

Also Angloirishbank.ie says 2.75 %  is effective from 26th June, so I assume that is their fixed rate for the next quarter.


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## SPC100 (2 Jul 2003)

*Re: Prize Bonds for short term*

I guess I should have done the maths first!

But with my 250,000 on deposit (not) - it makes it 
just about worthwhile


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## pthec (21 Nov 2003)

*Prize Bonds as alternative savings plan*

I tend to view Prize Bonds as an alternative to drip feeding a PIP or PEP or other gradual contribution savings plan. 

I have an aversion to management fees, both in these plans and in tracker or index funds. So I buy say 500 quid's worth of Prize Bonds at the start of every month, then after 10 or 12 months, I will cash the whole lot in, and use the cash to add to my equity portfolio. Then I'll start saving the 500 each month once more. 

I tell myself that the effects of inflation aren't too bad in this case, as I only leave the money there for a year, and there's the added bonus of being in with a chance of a prize, however unlikely. I guess this appeals to my gambling side. But at the end of the year, I have the cash to add to my portfolio, or for a holiday, or whatever.


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## rainyday (21 Nov 2003)

*Re: Prize Bonds as alternative savings plan*



> I tell myself that the effects of inflation aren't too bad in this case, as I only leave the money there for a year,


You're fooling yourself. If you hold prize bonds most of the time, you are losting money to inflation most of the time. The fact that you cash out each year and start again impacts the amount of money you are holding, but the fact that you are losing out to inflation.


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## John (22 Nov 2003)

*Prize Bonds*

I agree with you Rainyday.


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## Shahid (21 Jan 2004)

*what is the logic of the draw of prize bonds*

Tell me please about the logic of prize bonds how the draw of prize bond should held, on which crieteria it should be done ,in which language.
                 Thanks
mshahidnawaz9@yahoo.com


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (21 Jan 2004)

*Re: what is the logic of the draw of prize bonds*

www.prizebonds.ie


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## cerberus (17 Sep 2004)

*missing one point*

The money is also safe.
With deposit interest - dirt you are also losing to inflation

So for example, say €40, not needed for 6 years which is the best way to go.


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## Enaja (17 Sep 2004)

*Re: Prize Bonds for short term*

Do you need to check if you have won or do they notify you? I bought some two years ago and they are left somewhere for safe-keeping and I haven't done anything with them since!


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## endowed (17 Sep 2004)

*Re: missing one point*

Hi _Enaja_,

*"Do you need to check if you have won or do they notify you?"*

From the Prizebonds FAQ:


> How do I know if I've won a prize?
> All prize winners are contacted following each draw. In order to maintain confidentiality and security, correspondence is sent in plain envelopes. For prizes worth €250 or less a cheque is enclosed. For any prizes worth more than €250 a form is enclosed in order for the investor to claim their prize.
> 
> To ensure that you can be contacted to claim your prize, it is important that you inform us - by signed mail or fax - if you change address


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## Enaja (19 Sep 2004)

*Re: Prize Bonds for short term*

Thanks endowed, no brown envelopes have arrived so I won't be celebrating yet!


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