Author Topic: Premium bonds: Facepunch-worthy?  (Read 641 times)

without_a_map

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Premium bonds: Facepunch-worthy?
« on: October 02, 2017, 07:14:02 AM »
I've got £1000 of premium bonds from pre-MMM times, presumably I would be much better off cashing them in and buying more index funds?

shelivesthedream

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Re: Premium bonds: Facepunch-worthy?
« Reply #1 on: October 02, 2017, 07:16:49 AM »
I've got £1000 of premium bonds from pre-MMM times, presumably I would be much better off cashing them in and buying more index funds?

Yes.

Playing with Fire UK

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Re: Premium bonds: Facepunch-worthy?
« Reply #2 on: October 02, 2017, 07:22:14 AM »
+1.

But not facepunch worthy, just a very gentle prod to remind you to get on with selling them.

cerat0n1a

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Re: Premium bonds: Facepunch-worthy?
« Reply #3 on: October 02, 2017, 07:29:56 AM »
There have been times in the past where they weren't a bad deal for holding cash short-term. The fact that bank interest is now free of tax for most people has removed much of the benefit though.

https://www.moneysavingexpert.com/savings/premium-bonds has a pretty good summary.

without_a_map

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Re: Premium bonds: Facepunch-worthy?
« Reply #4 on: October 02, 2017, 08:18:31 AM »
Thanks all, that is my task for the month then!

TartanTallulah

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Re: Premium bonds: Facepunch-worthy?
« Reply #5 on: October 02, 2017, 08:24:43 AM »
But you just KNOW that one of your numbers will win the jackpot the month after you sell them ;-)

(I've got £5 worth, bought for me as a present when I was born. I've never won a penny.)

I don't think Premium Bonds are facepunch-worthy. They're not a priority savings vehicle for most of us, but if you've already maxed your pensions, ISAs, and tax-free-interest cash deposits, they're a safe way of generating, with average luck, a tiny tax-free return.



without_a_map

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Re: Premium bonds: Facepunch-worthy?
« Reply #6 on: October 02, 2017, 03:08:24 PM »
But you just KNOW that one of your numbers will win the jackpot the month after you sell them ;-)

(I've got £5 worth, bought for me as a present when I was born. I've never won a penny.)

I don't think Premium Bonds are facepunch-worthy. They're not a priority savings vehicle for most of us, but if you've already maxed your pensions, ISAs, and tax-free-interest cash deposits, they're a safe way of generating, with average luck, a tiny tax-free return.

Haha thatís why Iíve kept them so long, I did win £25 in the first year so it hasnít been a dead loss, definitely not maxing out all those other things though so time to move on!

skip207

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Re: Premium bonds: Facepunch-worthy?
« Reply #7 on: October 04, 2017, 02:53:56 AM »
I ducked out about 2 years ago when we bought our second house.
Had the max in there but used it all for the house deposit. 

Wins were getting to the point of a joke so decided enough was enough anyway.

There is always that chance you can win big though, so depending on you NW leaving a few grand in there is not the end of the world just for fun, but don't expect to win much.

A friend of a friend won one of the larger prizes after only being in for a few months so its just a lottery really.   

RobFIRE

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Re: Premium bonds: Facepunch-worthy?
« Reply #8 on: October 08, 2017, 12:10:54 PM »
In times of low interest rates on average Premium Bonds are a poor investment. But only "on average" as you could win a large prize.

In previous times of higher interest rates, for a large holding (so you are likely to get close to the average return), the returns could be reasonable given that it's a very low risk savings product. Particularly if you were a higher rate tax payer as the returns are tax free. However, even with the maximum holding the chance of significantly higher returns/a big win was/is still low, so it was probably only an appropriate investment if you needed to invest money that for some reason you could not accept a capital loss on and/or would need to take out again in the short term (e.g. deposit for house, money to cover tax bill etc.).