NS&I Premium Bonds - Any good???

[ScottyB]

Have been looking at putting some money aside in some premium bonds.

Main drive is to keep it tax free, i have used up my allowance of ISA's for the wife and I and had some cash in an ING Direct savings account but would have to declare tax on it.

At least with the Bonds route any profit is tax free.

Only problem is i don't think i have ever heard of anyone who has had a decent win on the bloody things, or even the odd 50 quid here and there to be honest.

Anyone got any experiences good or bad they would be willing to share which might help my decision?

I know the million pound prize is now 2 x prize winners every month, it may be my only chance of ever winning such an amount, along with the other billion or so bond numbers out there.

Seems perfectly safe with 8 days notice needed to withdraw any funds without penalty.

Regards

ScottyB

[Rob B]

Scotty,

Works for us, but too early to say if the regular wins will keep up with the bank rate.......

[antonye]

Speaking as someone that works in the financial industry ... go and see an independent financial advisor! They will advise you on what can give you the best rate, either fixed (in Bonds for example) or by investing it in some kind of instrument to try and out perform the market.

A good IFA will take a look at all of your finances and spot things which you should do before investing money - paying off credit cards, changing your mortgage, etc - to get you into a better financial position. There's no point in trying to get a 6% interest rate when you're paying 19% on a credit card...

[andyb]

"when you're paying 19% on a credit card"...

thought you were the king of 0% cards................ im on my 4th!

;):lol:

[antonye]

Originally posted by andyb
"when you're paying 19% on a credit card"...

thought you were the king of 0% cards................ im on my 4th!

;):lol:

That reminds me - my 9 month 0% Barclays ends in a couple of months, so that'll need replacing. I think I'm on number 8 at the moment ... :D

[Mr_S]

I'm with you on the 0% andyb. Virgin are even giving 0% on purchases at the moment.

Worth having a little chat with your mortgage company too, as a saving on the mortgage is a good investment. Assuming you have one....

Took me about 10 mins last week to get my rate reduced by 1.5% to .3% above base for 2 years with no penalties, restrictions or limitations just so I didn't go off to another bank. That's worth well over £200 / pcm to me, and I'll just overpay by that amount to settle earlier.

I can also withdraw any overpayments made with only 7 days notice.

In 2 years, I'll be having the same little chat with them again. If not sooner.

[Edited on 7-11-2005 by Mr_S]

[ScottyB]

See what you mean Antonye,

Have a FSA who sorts all this stuff.

They have got me into the ISA's which are at the max for this year both the wife and I.

Without going into my financial stuff on here in too much depth, no loans, all Credit cards are paid off in full every month and fairly sorted on the pensions mortgages and investments side after a recent financial review (read trying to flog me more policies)

Wanted a non FSA view of Premium bonds from actual folk who have them and have or have not realised any return on them, straight from the horses mouth so to speak.

[antonye]

Any kind of non-guaranteed return always carries some element of risk, even more so with the lottery kind of returns from premium bonds. From one extreme you can have someone who has put in £500 pm for the last 20 years and not won a penny, but some people put in £50 and win the lot first time round - same as the National Lottery really!

The only problem is that you need to beat the rate of inflation to keep your money worth at least the same as when you put it in - if you put £100 in now and never win anything, what's that going to be worth in 5 years time?

Have you seen that the HSBC are offering 8% on one of their accounts? That's a very attractive amount for a guaranteed return, given the current interest rates. Yes it's taxable, but it will still out perform inflation and a premium bond account that doesn't win anything...

BTW, I'm not a financial advisor, and this is not professional investment advice, so you can't sue me if your savings go tits up, ok? :D

[Ray]

I've heard the option of premium bonds offered as a good idea for the well loaded. The main reason being that any returns are not taxed, i.e. yer winnings.

This has been mentioned in the financial pages of the rags and on working lunch as far as I can remember.

Before anyone gets the wrong idea I haven't got any premium bonds and certainly don't fall fall into the well loaded category, just have a an interest in keeping a few shillings safe in case the price of ferret and whippet foods outpaces the money from me paper round!

Ray.

[doogalman]

My wifes premium bonds make more than she would get on high interest rate . She closed the off-shore account as pb's made more. Plus you do not have your stake at risk.
Works for some.

[ScottyB]

Thanks Antonye,

Can't say i have seen the HSBC 8% offering will have a look today.

The above explanation on the bonds makes sense. Thanks for taking the time to write it.

I suppose it is a case of seeing how they perform over a set period and compare it against savings elsewhere

[antonye]

Originally posted by ScottyB
Thanks Antonye,

Can't say i have seen the HSBC 8% offering will have a look today.

The above explanation on the bonds makes sense. Thanks for taking the time to write it.

I suppose it is a case of seeing how they perform over a set period and compare it against savings elsewhere

Well this is the crucial part of the problem - because premium bonds are a lottery, there is no guaranteed return which makes it impossible to compare against other savings. It's all down to your chance of winning and gambling your money that you will.

I've had £100 worth of premium bonds for nearly 15 years and have won twice, doubling my money. So yes, that's a pretty good investment. However, my sister has the block next to mine and she hasn't won a penny - and her £100 is worth a lot less now that it was 15 years ago. It's all down to chance.

The HSBC have been pushing the 8% on the telly lately...
http://www.hsbc.co.uk/1/2/personal/savings-investments/savings/regular-saver

[andyb]

Hey Antonye, i see your that good a financial predictor, your posting earlier than your displayed time! :lol::lol::lol:

[antonye]

Originally posted by andyb
Hey Antonye, i see your that good a financial predictor, your posting earlier than your displayed time! :lol::lol::lol:


I COME FROM THE FUTURE!!!!!11!!!!seven :borg:

[logyk]

If you look at the monthly results for Premium Bonds you will see that the main winners have largely bought in blocks of £5000.

I am ahead of the game for wins in the last 12 months.