Balanced Portfolio... Uk Premium Bonds

[highchol]

My Mrs has just won 200 quid. She thinks they are great and says everybody should have some as part of a balanced porfolio...what!

She says I'm unbalanced because I haven't got any.

[GuestHouse]

Premium bonds are an investment option, they are not a necessity.

I have a 12K worth and I generally win two or three times a year. Over the past five years they have given about 7%.

My nephew has a 100 pound bond and he won three times, small amounts at first and then a wopping 5K just before he went off to university.

This website gives some ideas of the prizes and the general spread of who wins what (prizes based on how much they have invested in Premium Bonds) Premium Bonds Prizes

Certainly if you are buying lottery tickets or any other form of single stake gambling you'd be a lot better off buying premium bonds - not that I am saying you do, but lots of people throw money at the lotter that would be a lot better off invested in PBs.

[Meerkat]

Depends mostly on your tax situation.

PBs are tax-free, so if you're a high-rate payer and have already maxed out your ISA, then a PB can be worthwhile compared to a savings account. You're only getting about 3.60% (the current effective rate that's used to calculate the value of prizes given out - obviously it comes down to luck on any individual ticket). That effective rate is massaged by the NS from time to time to reflect broader savings rates.

Compared to the lottery, from an investment point of view you'd be much better-off buying PBs - at least you're only gambling with the interest rather than the entire capital.

[dave2]

My Mrs has just won 200 quid. She thinks they are great and says everybody should have some as part of a balanced porfolio...what!

She says I'm unbalanced because I haven't got any.

ive got 65,000 quid invested in pbs through two family members with one holding 30,000 ( the maximum ) and the other with 5,000 and another 30,000 with a friend the family members pay all my winnings straight into my nationwide account taking nothing and my friend does the same but he gets 10% of anything i win on his numbers every month ! do they work .... ive won something every month but one for two years ( mostly 50s and 100s but lots of them ) and my total winnings up to this month are 3,800 quid so if you invest a lot , you do win often to all the people who will say ... you can get a better interest rate with nat west , hsbc etc etc. YES i know but this way i dont have to do a thing , the winnings are tax free, my friend gets his 10 % , we all look forward to seeing if ive won on the net every month , i dont have to do any paperwork or worry about tax etc . i get the money free of charges through my nationwide account and you never know ,i may win a million quid instead of getting a measly 4 or 5% from nat west etc so my system works for me as im more than happy to have won that much in two years and still have my original 65,000 already in for next months draw. dave 2 .... : ) ps its not happened yet : ( but if i ever win 5,000 on ANY of my 65,000 numbers my friend also gets an ALL expenses paid trip to thailand for a month and this month i had one win @ 100 quid and five 50s = 350 quid .... just enough for a few drinks and a nice bg i think : )

Edited May 4, 2007 by Maestro
Removed formatting codes for better readability

[highchol]

Just checked the Mrs winnings and they equate to a annual rate of 4.8%. So not bad and ofcourse theres always the chance of her landing the biggy and then I guess me becoming single again shortly after!