Prize Bonds are looking attractive alternatives to deposits

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?
 
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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 same for me "The Ghoul", NOWT in Sept..
Albeit with slightly less capital than yourself.
Its a farce. :-(
 
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
 
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.
 
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%
 
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.
 
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.
 
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.
 
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 ?
 
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.
Click to expand...

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.


No, you have the same chances regardless of the number of purchases that you split it across.
 
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.
 
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