Questions about prize bonds.

Bottom line is our hard earned and heavily taxed and inflation eroded income is willingly put away where it’s yielding the least return. We are regarded as plebs and most of us are too busy on the hamster wheel to notice. When we finally succumb to illness or death the government will take more of it back through the FD or CAT anyway. Makes you wonder.
 
The telling point is why is there a max holding? If NTMA where merely managing the national debt for the best return, why would they put any max on holdings? The max must have been set by the government and it must have been set because they envisaged state savings being more attractive than bank deposits. Somebody has decided to reverse engines - who is really calling the shots on state savings rates and terms?
 
Mortgage rates increases in Ireland over the past year have been relatively modest in relation to the rise in ECB base rates. The large level of deposits in Irish banks (with very low interest paid) gives the Irish banks plenty of leeway for this which they wouldn't have if they had to raise capital in the market. Prize bonds are a competitor with banks for savings. No doubt the government know very well that any significant move of deposits from the banks to PBs will force banks to raise deposit rates, which in turn will feed into mortgage rates (and in case they are liable to forget the banks will have reminded them).

For purely selfish reasons I would like a bigger prize fund for the PBs. But at a social level I think it is better to keep it low if this helps limit mortgage increases. I would guess most PB holders have done very well for themselves from property inflation anyway, so a little social solidarity with the younger generation wouldn't go amiss.
 
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