Parents considering money into Prize Bonds

[censuspro]

My parents are considering putting >150K into prize bonds. Net return is effectively the same as traditional deposits, they have instant access and also a chance of winning. They're into their late sixties so they're not going to start investing at this stage of their life. Question is, should they diversify a little or are their funds relatively secure, also do you receive interest of 1.75% on the amount invested?

 

[amadain]

Prize Bonds are NIL% return

The only return you MAY get is winning a prize (from 50 euro upto 1m)

 

[huskerdu]

There is some analysis and discussion on the topic here.

http://www.askaboutmoney.com/showthread.php?t=182819

 

[dub_nerd]

As said, you get no guaranteed return. However, for larger amounts, such as 150k, the prizes are structured such that you are quite likely to average a return between 1% and 1.5% tax free per annum.