Premium bonds. what do you know?

im thinking of getting some so let me know if you think there good or bad.

There a good LONG term investment, you can't lose money on them, and your guarenteed a win sometime.

Taken from the Which? website:

How safe is my money if I invest it in premium bonds?
Your original investment is completely safe and you can get it back at any time. However, you may not win enough in prize money to protect your savings from inflation. Other investments, such as National Savings & Investments (NS&I) index-linked savings certificates, offer a more certain return – but they can’t make you a millionaire, of course.

How likely am I to win a prize?
Every bond is entered into the monthly draw, with winners being selected at random by Ernie, the NS&I computer. Around a million bonds win their owners a prize (the odds of winning have been estimated as 24,000 to 1). The chances of winning a £1m jackpot are far lower, of course, as only two of these are paid out each month.

How much can I invest in premium bonds?
The most you can hold is £30,000. The minimum quantity of bonds you can currently purchase is £100 worth.

Do I have to declare premium bond prizes on a tax return?
No. Any winnings are tax-free and are not counted as part of your taxable income, so you don’t have to declare them.

How much interest do premium bonds pay?
Premium bonds don’t pay any interest in the normal sense. However, the monthly prize ‘pot’ is generated from interest paid on the total amount invested in bonds. This is currently set at an annual rate of 3.6 per cent. Individual bond holders may get more or less than this, depending on how frequently they win.

How can I find out if I’ve won a prize each month?

Check the NS&I website to see if you have won

Prize winners are normally notified in writing (or in person if they have won £1m). You can check for recent and ‘missed’ prizes on the NS&I website by entering your bond holder’s number. If you have lost track of old bonds there is a free tracing service here, too.

Are old premium bonds ignored in the prize draw?
No. All bonds are entered in each month’s draw, regardless of their date of issue (provided you have held them for a full calendar month following the month you bought them). A bond purchased in 1959 won the jackpot in July 2004. It’s true that more recent bonds win more often, but that is because there are more of these in circulation. Premium bond sales soared after the top prize was increased to £1m in 1994.

Can I inherit premium bonds from my parents?
Premium bonds can’t be transferred, but their value does form part of the estate of the deceased. Executors can claim this from NS&I by completing a special claim form or obtained by post from

National Savings and Investments, Blackpool FY3 9YP

So should I put my savings into premium bonds in preference to other options?
Premium bonds offer the thrill of a flutter without the risk of losing your original stake, but they do not offer a guaranteed return. Over the years your money could be eroded by inflation if you don’t win regularly, so it makes sense not to put all your money into them.

Alternative investments, such as Best Buy Isas, NS&I index linked savings certificates and Best Buy savings accounts, are a better bet for long-term savings and investment, particularly for anyone relying on interest to contribute to their income.

It's a risk free investment, You will get 100% of your money back wehenver you want it.

However the chances of getting a decent draw are slim.

Basically it's like playing the lottery but you get your cash back when you stop playing

Better then play lotto at least you don't loose any money.

Assuming you haven't got £30,000 spare to invest the max, try the minimum £100. Apart from inflation, you won't lose that £100 and you COULD win a big prize!

I've got £20,000+ in premium bonds and this month I won 3x £50 prizes. I get an average of £800-£1200 a year in prizes. The most I won in one go was £1000 but I'm hoping for the big one. If you buy them this month (Dec) you won't be in the draw 'till February. If, however, you choose to re-invest your winnings (as I do) those winnings will be eligible for the next month's draw.
Premium bonds are safe but the income in not guaranteed.You could hold £5000 worth for 10 years and not win a thing but you could hold £100 for a couple of months and win £1M, £100K, £50k, £25K, ....etc.
It's up to you whether you think this investment is for you.
Min =£100, Max = £30,000

There's a good free site which gives you the odds of winning:

http://www.moneysavingexpert.com/savings/premium-bonds-calculator/

I have had £155 in premium bonds, for over 25 years, and I have never won on any of them.

I would say it depends how much you have to put into them, if you don't have very much it isn't very likely you'll win anything although obviously you have to be in it to win it!

My father-in-law has £20k worth and he reckons he gets about 5% back on them over the year, I have £100 quid for the last 5 years and have never won a bean :o)

Shares are a good way to invest, however they do go up and down and are therefore only generally ever good if a) you intend on investing long term, and b) you won't be in a situation where you HAVE to sell them because if you do and the value is low at that time then you loose out. They do however also pay dividends out as well so you have to also take that into consideration.

If I had enough money I'd definitely put it into property, rent it out and keep it for a while then sell it on years later. Can't see that I'll ever have enough spare to do that though!

Some building society accounts offer quite good interest and have no risk at all.

Very good you can win money every month and never lose it!
Unlike shares they go up and down!

If you have some spare money I say invest in Premium Bonds you have nothing to lose and loads to gain!

I declare an interest here as I have Premium Bonds too. My return on the maximum investment is currently running at 8% p.a. over the last 2 years.
I have known people apply for repayment of 'old' Bonds, only to find that they win in the month they apply and reap a reward before cashing in!!

good if you are a cash rich higher rate tax payer.

Otherwise they are no good, very low average returns and no capital appreciation so lose real value over the long term due to inflation.

Premium bonds are good if you like a gamble. They pay out prizes but you are not guaranteed to win and the prizes range from anything to £50 up to £1,000,000 so it’s a bit like the lottery in a way. Unlike a bank account or cash isa, there is no interest paid. They are also tax free so holding some I believe is a worthwhile exercise.

Disclaimer:
The answers above are for guidance only and should not be acted upon without you receiving independent financial advice relevant to your circumstances. To find and IFA please call 0800 085 3250 or go to http://www.unbiased.co.uk.

They are a good way to put money aside and you also have the chance to win more, a safe gamble in a way.

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