Prize Bonds are looking attractive alternatives to deposits

NS&I are cutting the UK Premium Bonds “prize-fund rate” from 1.4% to 1% from December.

https://www.theguardian.com/money/2...s-prizes-direct-saver-investment-account-isas
Oh dear After all that effort to buy £50k back in July. It was looking good; 3 x £25 in August, 5 x £25 in September, that is an annualised run rate of 2.4% p.a. against my expected rate of 1.2% p.a. (I ignore the possibility of prizes in excess of £25 in these calculations) My expected run rate will now reduce to 0.85% p.a. Still better than elsewhere.
 
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Hi Duke of Marmalade, are the chances of winning on Premium Bonds better than winning on Irish Prize Bonds. I have approx 10k in savings but the interest rates make no sense to keep in the bank. Given the chances of winning on Prize Bonds are very slim I would be relying on luck more than anything but I might give the Premium Bonds a shot. Is it easy enough to purchase from the UK? What do I need to get started?
 
Premium Bonds pay 0.85% in £25 units. So with 10k you might expect just over 3 prizes per year but varying between say 1 and 5.
Prize Bonds pay 0.35% in €50 units so you should expect under 1 prize per year with little chance of more than 2.

As always I am ignoring the remote chances of hitting the jackpot, but maybe that can satiate your Lotto fixation, if you have one

Applying for Premium Bonds is a bit of an effort but it can be done on line.
 
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Ended up with 10 x €50 prizes for 2020 for 130k.
You would have expected on average 9.1 prizes. You are spot on average as it is not physically possible to get 0.1 of a prize. Your chances of 10 or more was 43%. Under the new rules you can expect on average 6.6 prizes in a year, with only a 14% chance of 10 or more.
SparkRite said:
Ended up with 0 x €0 prizes for 2020 for 45k
You would have expected 3.2 prizes with only a 4% chance of getting none. You were unlucky; are you sure you had them for the full year?
Under new rules you can expect 2.2 prizes per year with 11% chance of no prizes.
 
Ended up with 0 x €0 prizes for 2020 for 45k

Snap!

Well, almost. Nearly €50K invested and zilch in the 12 months to the end of November, 2020. Cashed them in then. Not directly related to the lack of return, but it will be a consideration as regards re-investment.
 
You would have expected 3.2 prizes with only a 4% chance of getting none. You were unlucky; are you sure you had them for the full year?
Under new rules you can expect 2.2 prizes per year with 11% chance of no prizes.
Thanks for the maths, Duke.
Actually have them for 18 months now and zero return.
 
Thanks for the maths, Duke.
Actually have them for 18 months now and zero return.
That is only a 1% chance. I presume you don't back the gee gees.
I had a long run of blank weeks last year which was a less than 1% chance but over the year I got a 0.33% return which is just below the expected 0.35%. In 2019 I got precisely a 0.35% return.
 
That is only a 1% chance. I presume you don't back the gee gees.

Indeed, I do not !
If it weren't for bad luck, I'd have no luck at all.

Actually about 6 years ago I had just shy of 100k in there and usually collected 3 - 4 €50's a month. Never anything higher.
Then they started their messing with the % payouts and it very rapidly went downhill from then.
I used to look forward to the Friday check, but don't even bother much now.
 
The only plus, is that there is a chance of a larger win than the €50. There's feck all in depositing in bank!
 
So, here we are, almost 2 years with 45k 'invested' and not one prize.

So that certainly disproves the title.
 
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I cashed in €100k of Prize Bonds and put it to better use helping out a family member. He is saving on loan interest. The few hundred Euro wins per annum were nice when I got the occasional cheque in the post. Now it's reinvested in Prize Bonds or sent to my bank. Not the same.

I still have over €150k and very few wins. This month I got a €50 and a €100. Very unusual.

Also switched €100k to the stock market and got a nice dividend of €1000 after tax in April with three more dividends (not as much) due over the next 3 quarters....

Grateful for what I have but all hard earned and need it to work for me also.....