It was in the context of PB's that it was posited but then that was back maybe 15-20 years ago when the prize fund might have been about 3.5% of overall holdings so certainly more attractive to institutional investors. Anyway just recalling and repeating what I read back in the day, to discern whether there might be any validity to it (and also note DoM's follow up)
What percentage interest rate is paid in prizes on Prize Bonds
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It was in the context of PB's that it was posited but then that was back maybe 15-20 years ago when the prize fund might have been about 3.5% of overall holdings so certainly more attractive to institutional investors. Anyway just recalling and repeating what I read back in the day, to discern whether there might be any validity to it (and also note DoM's follow up)
Non-individuals can hold up to €5M.
The €250k per individual (€500k per joint holding) limit was introduced in November 2015. There is some evidence that there were holdings very considerably in excess of these limits at the time. The limits did not impact existing holdings, other than to block them from increasing further. It was not stated publicly, but anecdotally the limits were introduced by Merrion St at the behest of the banks who were aggrieved at the flow of funds away from their interest free deposits and into Prize Bonds at the time.
The scope for "non-individuals" to purchase prize bonds is now very restricted. It is limited to "a Registered Charity, an unincorporated body that does not carry on business, or a friendly society registered with the Registrar of Friendly Societies". I believe it was wider previously.
Duke of Marmalade
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Very interesting! There is no doubt that PBs were a no-brainer for large holdings when the implied interest free of tax was far superior to bank deposits. So I become more convinced that these miserly rates are to flush out elephants and not the mere €500k joint holdings. Hopefully when the elephants have all fled there will be a return to the good old days.
Between myself and my wife we had €500k of Prize Bonds, now reduced to €200k.
We get about 1 x €75 prize per month.
When we had the €500k our prizes were similar.
This year we will further reduce our holdings by €100k.
I would rather my children save on their mortgage interest which to me would mean a return in excess of 2% or whatever interest rate they are paying on their mortgage.
We get about 1 x €75 prize per month.
When we had the €500k our prizes were similar.
This year we will further reduce our holdings by €100k.
I would rather my children save on their mortgage interest which to me would mean a return in excess of 2% or whatever interest rate they are paying on their mortgage.
Better off in the bank on that case
Duke of Marmalade
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There is 97% chance you would receive more than 12 €75 prizes in a year. You were either unlucky or the figure is only a loose estimate.
There is a 50% chance you would get 20 or more such prizes in a year.
AIB's 2% on deposit is equivalent to 36 €75 prizes in a year and it would be only .01% chance you would exceed that in €75 prizes.
There is a 0.5% chance (once every 200 years) of winning a bigger prize between €500 and €500k in any year and the weighted value of that possibility is worth 0.23% of your €200k investment i.e. €460.
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Practically getting nil interest from the banks so I thought why not?
I was also parking funds there as I had two children getting mortgages.
Moved some funds from the Prize Bonds to both AIB and PTSB when I could get better rates on lump sums.
Now I am trying to do my best to spend it rather than save it.