Prize Bonds -> Unit Linked Investments?

That independent BBB+ rating is from Fitch, right? That'd be the same Fitch who upgraded Anglo Irish Bank from A to A+ in late 2006 citing increased diversification of assets and funding when, in fact, Anglo were almost exclusively up to their necks in property during the soon-to-burst greatest property bubble in history? I don't think I'd be relying on the diagnostic power of agency ratings when choosing an investment.

Marc as I said I am fairly up to my neck in state savings. However, I didn't go for the PBs. I thought about it hard, but in the end of the day the chances of the big wins are very remote even for a large holding.

Nothing is 100% safe. State savings with their politically protected status and early exit facilities are about as safe as there is - even safer than German bonds, certainly safer than gold and most definitely not BBB+.

According to Moneyfacts there are only three Isa products that negate the effect of inflation, and once taxpayers have used these there is no risk-free way of stopping cash being eroded by inflation.
The effects of inflation can be significant. £10,000 invested five years ago, allowing for average interest and tax, would be equivalent to £9,016 today.

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Was it Buffet who said cash deposits were the worst investment of all??

According to Moneyfacts there are only three Isa products that negate the effect of inflation, and once taxpayers have used these there is no risk-free way of stopping cash being eroded by inflation.
The effects of inflation can be significant. £10,000 invested five years ago, allowing for average interest and tax, would be equivalent to £9,016 today.

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But that's a UK website, right? And interest rates have been lower, and inflation higher, in the UK compared to here. Here you would have got 21% return (3.53% APR tax free) from a 5½ year Saving Cert, or 5%+ AER gross from a bank over the same period, and inflation was probably negative for some of it. Apples and oranges.

You can't compare unit linked investments with prize bonds, apples and oranges, prize bonds are for depositors like state savings, unit linked funds invest in different asset classes with a higher risk profile. anyone in a low risk or capital guaranteed unit linked fund shouldn't be there as management charges probably outstrip growth potential

Duke of Marmalade said:

State savings ...are certainly safer than gold...

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That felt a strange thing to say at the time. After all the perception is that nothing is safer than gold. In one sense that is true - gold is the asset which is least likely to lose all its value. But that very property conveys to it an Armageddon insurance status especially for the super rich with a result that its price and therefore its current value becomes high risk.

I had €100k in prize bonds until before Christmas when I cashed in and went into the 3 year State Savings before the rate reduced, I did well with the prize bonds and almost matched what the best deposit account paid allowing for DIRT.

With deposit rates now much less than before I went back to my prize bond spreadsheet and recalculated my returns based on the current best deposit rate available, I would be up about €600 on that over the 27 months I was in PB's.

So I am going back into PB's, current deposit rates, DIRT , PRSI coming etc is encouraging me, the fact this is near cash appeals also, I got my funds last time within a week of surrendering the bonds so unless all hell breaks loose I should be able to access this cash quickly and of course they are a first obligation of the Government.

What are the views now post Cyprus, am I considered nuts..?

First of all, you should note that the Prize Bonds interest rate fell from 3% to 2.25% in December.

Stripping out the jackpot prize which is pretty much impossible to win, this means the expected return is now around 1.5%.