It is 0.98% AER (annual equivalent rate = compounded rate per annum). The AER is shown because it is mandatory to do so, but it is more correct to think of it as 5% total return after five years, especially as most of the return accrues in the last six months. You can take your money out any time but you will not get much of the return as it is on a sliding scale. Do not plan on getting your 0.98% per annum if you cash in before the five years is up.
I'd agree that share dividends are fairly decent at the moment but stocks appear to be higher now than ever. Not sure if it's The Donald affect or Brexit but it could be a bumpy ride... Meanwhile I'm playing it safer and purchased some prize bonds recently (even though I haven't had too much luck in the past). I've followed prize bond threads on AAM and Boards.ie over a number of years but yet to read an account of anyone winning more than €100I have some shares that are producing between 3% & 5% dividend yield. I was tormented to purchase some more of these. It is difficult not to be tempted. I decided to add to my Prize Bonds stash based on my previous wins. I can tell you if they don't perform I will sell them just as quickly. It is interesting, but it is the same batch of numbers that keep winning. Others...nothing.
It is interesting, but it is the same batch of numbers that keep winning. Others...nothing.
I've followed prize bond threads on AAM and Boards.ie over a number of years but yet to read an account of anyone winning more than €100
Ultimately, prize bond returns are down to luck and nothing more...
....While that is true, any game of chance will produce a statistical outcome determined by the arithmetic of the game. If you play long or often enough it is a practical certainty that the average outcome will be achieved. This is the so-called "law of large numbers". With prize bonds it is a matter of investing a sufficient amount for the average to be achieved within a short time horizon. With a single prize bond there is essentially no chance of this occurring, with €100k+ there is a very good chance of achieving the typical return (currently 0.8% tax free) over the course of a year. Many people seem completely unable to grasp this -- they get indignant at the thought that their couple of mouldy old bonds sitting in a shoebox for years have less chance of winning than someone else's freshly minted €100k worth, and believe nutty conspiracy theories about "only newer bonds winning".
The majority of Irish individuals have sufficient cash to buy prize bonds, so as to achive the average in a relatively short horizon as you propose (even €100k over 1 year would not be anywhere near enough to get the average return, imho).
Remember, the financial amount invested in prize bonds and the fact that this number continues to grow, particularly in these times of low deposit returns etc. As such, I refer to my original comment - the returns are down to luck and nothing more...
Were it not for the fact that your capital investment is protected and can be returned to you at a later date, it would be right up there with playing poker for the majority of people, as I see it
I suspect you mean the majority "do not have" sufficient cash.
Actually, the fixed amount invested is good news for the return...
For small investments, that's true.
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