You’ve been lucky, well done. The effective 'interest rate' of Premium Bonds based on average winnings is something below 2%. Anyone able to transfer money into a savings account or ISA can get a guaranteed rate of more than 6% at the moment.
It’s 4%
Ok, fair enough, I see that NS&I has increased the prize fund to 4%. But (and it’s my fault for using a phrase like 'effective interest rate') this isn’t the equivalent of an annual rate because it’s obviously not guaranteed, and in fact most PB investors will gain less than that, particularly if they don’t have a big stake in Bonds. Martin Lewis explains this much better than me, about how for one person to earn more than the average, a much larger number of people have to earn less than the average, but his conclusion is that for a majority of people, Premium Bonds are a poor investment. What they offer instead is hope. Like buying a lottery ticket, you agree to the statistical likelihood of you losing money in exchange for the off-chance that you might win big. Despite lottery tickets being a poor investment, I confess to occasionally buying one for the reason outlined! Most of us don’t invest rationally.
In isolation perhaps yes, but they are useful as part of a balanced portfolio, particularly if you have already used up your ISA allowance So can’t obtain the headline rates bandied about. Winnings are also tax free and the investment is very liquid and 100% safe.
But you don't lose money? You can get back your investment in full whenever you like. A lottery ticket is the opposite.
Really, they don't send an National Savings employee out anymore to do it ? they did when i won
You make your own investment decisions, absolutely. It’s not my preference but YMMV. You can get more than 6% on non-ISA savings though of course you’d pay tax on the interest.
Well, you actually lose money as inflation is high. Unless you win one of the bigger prizes, or a large number of smaller ones, you will always get back less than you invest. Same principle for a lottery ticket really, except you agree to lose all your money in exchange for a higher reward if you win big. The classic risk-reward relationship.
Not much more than 6…..maybe 6.1/2 before tax and use of PIA…and it’ll be a fixed term…say 1 or 2 years without access
Someone from the Post Office visited when i last won £25
As you do with cash + interest as long as the rate of inflation is higher than your interest rate.
haha, the national savings employee went to my home, then came to my work to find me..
