Under new rules the chances of a single PB winning are as follows:
I think we are into philosophical territory here. A holding in a share could probably be characterised as having a half chance of falling 10% next year and a half chance of rising 20%. We don't call that a ticket for a raffle. We call it an investment, presumably because on average the returns are +5% and this is better than an asset with certainty of returns. In the past Prize Bonds passed this test and were a genuine alternative to deposits. Not so just at the moment.
"exotic" = unreliable, difficult to interact with, very poor support in most cases with additional tax reporting requirements that can end up costing you
In that case shouldn't you buy bank shares if the returns are so generous?
I don't get your reasoning here but it sounds over complicated to me. The prize bond draws are basically raffles. A prize bond is a ticket for those raffles. It's refundable at its nominal face value at any time after being held for 3 months. That seems a lot simpler to me. And factual.
Your objection seems to be based on the fact that a "raffle" like mechanism is involved. Personally I don't care if the underlying random process is some electronic raffle or the bizarre mood swings of the stockmarket. What matters to me is the odds on the outcomes and if they are a good "bet". I presume that if Prize Bonds raised their pay-outs 10 fold you would have a little dabble yourself, even though they would still be delivered by the offensive raffle mechanism.
Did I say somewhere that I haven't bought Bank Shares as part of my overall portfolio ? And what has that got to do with either Deposit Rates or Prize Bonds ?
Agree with the overall thrust of your points here and in previous posts. Prize Bonds are deposits under another name. While the rate is lower than the return at present on AIB's term deposits, a full comparison between these and Prize Bonds would also factor in in the higher state guarantee up to €250,000/€500,000 vs the DGS which is maxed out at €100,000/€200,000 and Prize Bonds being a demand product (after the initial 3 months), both important factors for many depositors.
I am guessing that withdrawal isn't absolutely instant / next day (or am I wrong?) so maybe a fair comparison is with a 31 day notice account.
Fair Point. In my experience, specifically relating to Prize Bonds, using the online system, it takes 4/5 working days from "cashing-in" to the money landing in my bank account. Technically not demand, but in the real world as near as generally makes no difference in the majority of cases. I've had a number of experiences where withdrawing substantial sums from demand accounts in Irish banks took a similar amount of time when their errors, mistakes and bureaucracy are factored in.
No, my objection is to calling it an investment.
I do have some.
I don't think readers are very interested in either word games or mortality plays. They are interested in a good return for their money. Prize Bonds pay a statistically estimable return - call it an evergreen free "raffle" ticket if you like.
Reminds me of Harold Wilson calling the UK Premium Bonds a squalid little raffle.
An example of passive aggression would be posting a statement such as:
Wait for a full year. I predict you will then be close to the projected €750 return.I went back into Prize Bonds in January for 100k. Only 1 €75 win last week, should have (per Duke's calc) got about 5 wins by now, really hitting the low probabilities with my holding