Prize Bonds are looking attractive alternatives to deposits

I lodged €50k back in April. Was going very well until November. See below...
Probability is a strange thing. Although you are likely to see things averaging out in the long run, it would be extraordinary if you didn't see any fluctuations in the results -- in fact that would be the most surprising thing in any run of luck, good, bad, or otherwise.

So the first thing I would say about the above is that we can ignore the €1,000 win as a complete and utter fluke. For your level of investment at current odds you would expect to win a €1,000 prize every eighty years on average. You will quite likely never see another (although having won one already doesn't make you any less likely to win another in future draws -- that's a common misconception that people have).

The next observation is that even ignoring the €1,000, you were way ahead of the odds for May to October. Assuming you bought at end of April and were eligible to win from start of May, you were running at an annualised return of 2%. The average (before the November changes) was around 1.1% if memory serves me right. You got almost your entire annual average in just six months. So perhaps a more pertinent question is why you were doing so well until November, rather than why you have done so badly since! (although the answer either way is: random chance).

If your figures are up to date, then I think you are saying you haven't had a win for about 14 weeks on the trot. That's bad luck, but it's far from extraordinarily bad luck. Since the November changes, your €50k stands to win a €50 prize on average once every seven weeks. You've gone a little over twice that without a win. Here's a chart of the odds (specific to your €50k investment) of you winning each possible number of €50 prizes from 0-20 in the year starting November last:



Here's the data:

0 1 2 3 4 5 6 7 8 9
0.0461%0.3545%1.3614%3.4857%6.6934%10.2825%13.1633%14.4439%13.8679%11.8354%

10 11 12 13 14 15 16 17 18 19 20
9.0907%6.3477%4.0630%2.4005%1.3170%0.6744%0.3237%0.1463%0.0624%0.0252%0.0097%


If you were to only win once every 13 weeks, you'd win 4 prizes in a year. To get the odds of winning that number or less, sum all the bars from 0-4. You get 11.94%. That means you have a nearly one in eight chance of winning four or less times. If it happened I'd say it was bad luck -- you have a better than 7/8 chance of doing better -- but I wouldn't say it was outlandish. And it would mean most of your year would look pretty much as barren as the period since last November.

With this sort of draw, the odds are less "lumpy" the more you invest. The odds of getting near the average return are much better for €100k than €50k even though, counter-intuitively, the average percentage return is the same for both amounts. In statistical terms, the distribution in the chart above has a higher standard deviation from the mean than the equivalent chart for a €100k investment.
 
Last edited:
Here are my wins since the 12th September - I picked that date as it was the first draw with my newly purchased batch of 75k. Also, this screenshot shows what happened from the 7th November on which was when the prize fund was reduced. Obviously this is a short time period so I wouldn't read too much into it.

Edit: the below table may be confusing - the "invested" column is my way of tracking which batch of bonds that the win came from. My total investment is 175k.

 
Last edited:

Off the top of my head, on €175k you'd be looking at averaging forty-two or so €50's a year up to November and twenty-eight or so after. So the nine wins in two months to start of November, and ten in three months since, both look slightly ahead of the odds.
 
Nothing on the 13th Fed either, I have posted off my instructions to cash all my bonds in, I phoned prizebond company last week as i had a few questions about the prizes etc,the woman on the phone said they were getting alot of calls/complaints about the prizes of late.
Anyway best of luck to all that are holding on to theirs,it was a really interesting experiment.

Pat
 
Interesting to note that the latest Prizebonds FAQ (from late last year) on their website shows the total amount invested is up a couple of hundred million even since this thread started, and I believe it was up several hundred million in recent years leading up to that. I wonder will we start to see it drop again as the shine goes off them for bigger investors like PP and others above. Or is the majority of the investment in small increments from people who more or less forget about them? My gut (and PP's anecdote above) tells me that there could be a considerable reversal.
 
Like postman_pat I'm considering my options - from a quick calculation my "rate" on the PBs is currently running at 0.65% while I'd get 0.885% net from an instant access bank account. On 175k that's a difference of over 300 euros in a year.

I have to avoid getting into a thought process where I accept a lower PB rate because I'm hoping for "Big Wins"

However I do generally favour State Savings over the banks, I find the banks to be a pain in the This post will be deleted if not edited to remove bad language to deal with.

I already have a lot in the 10 year Solidarity Bond, mostly issues 3 and 4. Also have savings certs (issue 17 ) and savings bonds issue 12. The savings bonds are now maturing and I'm putting that money into 10 year SBs. If I didn't have the above I probably would have cashed in the PBs for some other state savings product by now.
 
anyway received my cheque yesterday. took less the 5 days.... will keep a look at thread as a hurler on the ditch from now on!
 
I think so, yes, just like the prizefund. :-(
There are some wonderful contributions here from really knowledgeable investors.
It's very useful and comforting too to be able to drop in and read through and thereby acquire a good insight into
all or most of what holding PBs entails. I find it commendable and sincerely hope it continues.
Thanks contributors.....all !
 
Reactions: jim
Wins have dried up for me hence the lack of posts - no wins since the 13th February. I calculate my return to be 0.86% since the reduction in the prizefund in Nov 2014 (175,000 invested, 19 draws from November to date, 550 euro won)
 
The Ghoul......that's food for thought alright and makes me very reluctant to increase my stake. In fact, don't think I'll go there.
 
yes indeed... i wonder if interest rates start to rise (sometime),will the prizes be increased as well?
 
Nice one Ghoul, zilch today for me, not surprising seeing as how you whipped 4 of the prizes.
 
Outrageously jammy, Ghoul. You sure you're not a shill from the Prize Bond company here to convince us to invest?
 
Yeah it was a nice result today. I haven't tried to work it out but I'd say the probability of winning 4 x 50 in one draw with the current prize fund (even with the relatively large amount I have invested) is quite low.

Also, I go several weeks winning nothing, post on this website about cashing my PBs in, then win 4 x 50 with all of the wins coming from a batch of 100k and no wins from my batch of 75k. There are probably some interesting statistics, logical fallacies or conspiracy theories that could be discussed here!
 
Last edited:
.....wonder if that indicates that the more recent bond purchases really do have a better chance of winning ?