Prize Bonds are looking attractive alternatives to deposits

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
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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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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?
 
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?
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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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STEINER said:
Ended up with 10 x €50 prizes for 2020 for 130k.
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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
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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.
 
SparkRite said:
Ended up with 0 x €0 prizes for 2020 for 45k :rolleyes:
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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.
 
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.
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Thanks for the maths, Duke.
Actually have them for 18 months now and zero return.
 
SparkRite said:
Thanks for the maths, Duke.
Actually have them for 18 months now and zero return.
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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.
 
Duke of Marmalade said:
That is only a 1% chance. I presume you don't back the gee gees.
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Indeed, I do not !
If it weren't for bad luck, I'd have no luck at all.:D:D

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. :(
 
The only plus, is that there is a chance of a larger win than the €50. There's feck all in depositing in bank!
 
So, here we are, almost 2 years with 45k 'invested' and not one prize.

So that certainly disproves the title. :eek:
 
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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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