Prize Bonds are looking attractive alternatives to deposits

ClubMan

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45,218
Prize Bonds are not an investment.
They're a ticket for a raffle, with long odds on winning anything significant, that's redeemable at the nominal face value which will erode in real terms over time.
No harm in having a few (I do) but they shouldn't generally be a significant part of your overall "portfolio".

What is your investment timeframe, when will you need the money and for what?

Do you have any debts, especially non mortgage debts?
Paying them down may be a better idea/return.

Are you investing in a pension?
What's your overall financial/personal situation?
 
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Ryan

Registered User
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182
Age 30, single, no debts, credit card paid in full every month. Currently renting and that’s not changing in the medium term . Earning just under €40k but that’s not enough to buy on my own

I pay 2% of my salary into a pension, employer pays 8%, can increase this to 4%.
I hace €18k in an investment fund and the rest on deposit. The term investment perhaps wasn’t the right word
 

ClubMan

Registered User
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45,218
If you're saving for a house deposit then maybe something like Prize Bonds is suitable for your needs. You may win something and you're unlikely to get much extra on deposit. But it depends on your timeframe.
 

Ryan

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182
It’s going to be a few years , really depends on how much I can increase my salary or mortgage rules change.Where else would you put a lump sum the way things are now. There are 3/4 year state savings options too I noticed
 

Duke of Marmalade

Registered User
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3,773
Are Prize Bonds still a good option? Have €55k in KBC to invest
If you deposit this in a notice deposit account with, say, BoI you will earn €16.50 p.a. subject to DIRT.

If you buy Prize Bonds then over the course of 1 year the following are your possibilities (all returns tax free):
6% chance you will get ziddly squat
18% chance 1 prize of €50
24% chance 2 prizes worth €100
22% chance 3 prizes worth €150
15% chance 4 prizes worth €200
8% chance 5 prizes worth €250
7% chance more than this in €50 prizes
In addition you have the "€55 worth" of "lotto" chances of winning prizes up to €250k.

A tad better than bank deposits IMHO
 

ClubMan

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45,218
6% chance you will get ziddly squat
18% chance 1 prize of €50
24% chance 2 prizes worth €100
22% chance 3 prizes worth €150
15% chance 4 prizes worth €200
8% chance 5 prizes worth €250
7% chance more than this in €50 prizes
In addition you have the "€55 worth" of "lotto" chances of winning prizes up to €250k.
Can you explain how you arrived at the percentages above and what the "lotto" reference means please? Thanks.
 

Duke of Marmalade

Registered User
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3,773
Not sure if it was posted before but this is an interesting opinion/analysis...
Money smart said:
The odds of winning a prize (and thus earning ‘interest’) are pretty remote.
For €55,000 the chances of winning some prize, albeit most likely a €50 prize but still beating the pants off deposits, are 94%.
This gross 0.5% notional rate of return is skewed higher by the small number of very large prizes and is unrepresentative of probable returns.
Ignoring the prizes in excess of €50 the "notional" rate of return is 0.40%.
It is therefore necessary to put in a fairly substantial investment, in excess of €10,000, to get a reasonable return within a reasonable period of time.
Well yes, €10k has a 60% chance of paying Nil. The max joint holding of €500K has a 80% chance of earning more than 0.2% tax free. To me it is a better option than bank deposits but obviously Money Smart would prefer you followed this advice:
Money Smart said:
Do you want to gain a better return without taking crazy risks? Call me on 01 276 0006 or 086 850 8577.
 
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