Premium Bonds

should invest his money in some lurpak...
 
No wins in 2 months. What the fudge is going on :mad::D
 
I got 1 £25 for me and 1 £25 for the £45k I invested for my mum. That's her first win in a year
 
1.4% of £10,000 is £140. The minimum prize is £25, so on average you could expect 140/25 = 5.6 prizes a year. That means your chances of winning in any month is 5.6/12, which is slightly under 50%.

That ignores the higher-value prizes, which worsen the odds a little, though not by very much.

So let's say you could expect a prize nearly every other month.

Sorry but your average figures are complete rubbish. Each bond (according to MSE in June 2022) has on average a 1 in 24,500 chance of winning £25. When it comes to winning the larger prizes the odds increase dramatically.

I purchased £10k of bonds in July 2020 and my first eligible draw was 4th August. From then to me deciding I was wasting my money and closing the account after the 3rd May draw this year (22 eligible draws) I won £75, 3 x £25. First win was in the December 2020 draw, then January and May 2022.

I probably could have got 1.5% on a 2 year fixed rate bond in 2020 which would have earned £150 pa in interest. Now my £10k is in an easy access account earning 1.32%, but I could stick it an 18 month fixed rate Cash ISA at 2.25% if I so desired.

However, interest rates are rising and look set to continue to rise for at least the next 6 months, and it's possible the base rate will increase to 2% 4th quarter or even higher.
 
Would you care to explain how you work that out? Apart from using your own experience as an illustration, that is.

If one bond has a 1 in 24,500 chance of winning, then 10,000 bonds have 10,000 in 24,500 = a 1 in 2.45 chance, or about 41%. My own figure was 5.6/12, or 47%. Allowing for the effect of higher-value prizes, which I mention, I don't see how you can call that 'complete rubbish'.

In your own case, you earned about 0.4% on your £75, which isn't great, but you went into it with your eyes open, knowing it's a gamble. Many people would have earned nothing at all, and many several £'000s

The figures aren't rubbish; they are correct as far as they go. Your experience is well within what you might expect.
 
That's doesn't sound right either. No way is it a 1 in 2.45 chance, even if you have 50K of bonds.

There's a calculator on MSE that works out what you would win on average, for the amount of bonds you have.

After that, it all goes rocket science :D
 
I probably could have got 1.5% on a 2 year fixed rate bond in 2020 which would have earned £150 pa in interest. Now my £10k is in an easy access account earning 1.32%, but I could stick it an 18 month fixed rate Cash ISA at 2.25% if I so desired.

However, interest rates are rising and look set to continue to rise for at least the next 6 months, and it's possible the base rate will increase to 2% 4th quarter or even higher.
I assume you realise you have a £1000 personal savings allowance? (which you don't pay tax on). There's little point saving into a cash ISA if you've not reached that limit. You can get around 2.7% on a 1 year fixed rate bond now. A little less if you want monthly interest. Currently just over £35k can be saved without paying tax, although that will reduce as interest rates rise.
Note- if you're a higher rate tax payer, your PSA is £500. But you still wouldn't pay tax on the interest on your £10k savings, until interest rates are considerably higher.
 
According to @Carbon 60, every bond has a 1 in 24,500 chance of winning £25 every month. and I see no reason to doubt that, or check it.

So if you have 10,000 bonds, you have a 10,000 in 24,500 of one of them winning £25 every month = 1 in 2.45, or 41%. What's wrong with that argument?

If you have 50,000 bonds, your chances of winning £25 in any month go up to 2 in 1, or about 200%.

This is not crazy probability. The bonds are not linked: each has its own probability of winning. It simply means that, on average, if you have £10k of bonds, you'll win £25 about 5 times per year (= 41% x 12); with £50k it rises to £25 twice a month.

These figures are simple calculations from the declared interest rate of 1.4%. No matter how many bonds you'll have, on average you'll get back 1.4% in prizes every year, but because the minimum prize is £25 it comes in less frequent chunks.

1.4% of £10,000 = £140 = roughly 5 prizes of £25, allowing for higher value prizes taking some of the payout. And 1.4% of £50 = £700, which is again somewhat more than 2 prizes x £25 each x 12 months.
 
According to @Carbon 60, every bond has a 1 in 24,500 chance of winning £25 every month. and I see no reason to doubt that, or check it. <snip>

You'd be right to say the more bonds you have the better your chances of winning, but the median winnings for £10k on the MSE Calculator show you could win £100 pa on average. So to look at this from another point of view, every month you have 10,000 bonds in the draw, a total of 120,000 bonds over 12 months, and out of those 120,000 bonds 4 of them (might if you have average luck) win a £25 prize.
 
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How much do you need to win before the wife gets a few quid then?
Haha! She has her own, but we both just re-invest winnings anyway, so neither of us actually see any winnings so to speak.
 
You'd be right to say the more bonds you have the better your chances of winning, but the median winnings for £10k on the MSE Calculator show you could win £100 pa on average. So to look at this from another point of view, every month you have 10,000 bonds in the draw, a total of 120,000 bonds over 12 months, and out of those 120,000 bonds 4 of them (might if you have average luck) win a £25 prize.
Correct

Each bond has a 1 in 24,500 chance of winning £25, each month. So 10,000 bonds have 10,000 / 24,500 = 0.41 chance. So in a year you'll win on average 12 x 0.41 = 4.9 £25 prizes, totalling £122. That's 1.22%; the rest of the 1.4% goes into the much rarer bigger prizes.

But you can't win 4.9 prizes, and in fact you can't predict how many prizes you will win. The best we can say is that with average luck you'll win 5 prizes most years and 4 in the rest; with the occasional big prize thrown in for luck.

These figures scale reasonably well: you'll get a 1.22% return with any number of bonds (ignoring the unlikely bigger prizes). But smaller invested amounts hit the £25 maximum buffer, so that you are less and less likely to get even one prize a year. At 1.22%, you'll need 2,050 bonds to average a single £25 prize each year.
 
After last month's £550, this month I "only" won £75 but I should be happy as that is well above what I'd get in interest :)
 
Anyone know why it takes 2 months from buying Bonds for them to be included in the draws. Seems a bit of a swizz...:confused:
 
Anyone know why it takes 2 months from buying Bonds for them to be included in the draws. Seems a bit of a swizz...:confused:

The rule is that you have to have owned them for one full calendar month before they are entered into the draw, so if you purchase on the last day of a month, then it's less time before you are up and running. Not sure why this is, but it's always been the same since I started buying them.
 
The rule is that you have to have owned them for one full calendar month before they are entered into the draw, so if you purchase on the last day of a month, then it's less time before you are up and running. Not sure why this is, but it's always been the same since I started buying them.

Thanks for that, I'll make sure I purchase them towards the end of the month from here on in. I invested £1k yesterday and am not in the draws until October, quite ridiculous really!
 
Thanks for that, I'll make sure I purchase them towards the end of the month from here on in. I invested £1k yesterday and am not in the draws until October, quite ridiculous really!

Yes it does seem a long time doesn't it.
 
Only £25 this time, MrsD doesn’t have the App so waiting a few days for email to tell she’s won a million. (She’s one in a million by the way). :D :D
 
Only £25 this time, MrsD doesn’t have the App so waiting a few days for email to tell she’s won a million. (She’s one in a million by the way). :D :D

she can check online anyway... I'll be checking mine in the next 30 minutes or so when i access my personal laptop...
 
Only £25 this time, MrsD doesn’t have the App so waiting a few days for email to tell she’s won a million. (She’s one in a million by the way). :D :D

I don't have the app, I just check online with my browser. You just need to type in your holders number.

 

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