Premium Bond Diary

At the end of November 2003 I invested my 30,000 savings - mortgage deposist - in Premium Bonds. My aim being to see if I could get a better 'return' from the Bonds than from the interest I was receiving from my building society.

Buying the Bonds in November meant that I was eligible for draws from January 1st 2004.

Winnings so far:

January 2004 1 x 50 cheque

February 2004 1 x 50 cheque

March 2004 3 x 50 cheques (150)

April 2004 1 x 50 cheque

May 2004 - NOTHING, NOT A JOT

June 2004 - NOTHING, NOT A JOT

J.

"John Smith" wrote

So overall, you've done very much the average - as you might expect.

Out of six months, you have six prizes.

Out of six prizes, they are all 50 (OK, you might have hoped for one of them to be 100, but never mind!).

300 quid over 6 months is 1%, excluding the effect of compounding

I wish that I weas this lucky(!)

I've had 20,000 invested for 5 years or so. For the first couple of years I got an OK return but in the last 15 months I have had 5 wins of 50 pounds each at exactly 3 month intervals, they arrive in the post with my VAT return :-(.

I'm thinking of cashing in.

tim

I am doing it as an experiment simply because I have been getting poor interest in the BS. I will continue until the end of the year when, in all likelihood, I will cash in.

"Mike NG" wrote

... which is around 3.3% gross per year.

4% p.a. gross would be a monthly "win" of 60 (as Doug indicated) -- 10 per month for 6 months less than the actual winnings. I make that 60 behind, as Doug did.

Which is spectacularly unspectacular. Unless those who run this lottery get their act together and revise their average payout rate upwards PDQ, premium bonds will no longer be as attractive as once they were, except to those who are in it for the thrill.

The payout fund may only be based on a 2.6 percent interest rate but the 'prizes' are tax free so the investment could be equivalent to a return of around 4.3 percent for some people with a substantial investment.

This must be better than the lottery run by Camelot where the average punter spends £57 to get back £10.

Keep us posted as to the performance as I'm very interested in this subject.

The only benefit I can see over a BS is that there is a chance, albeit a small one, of a very generous win. Otherwise the returns are pretty standard.

I bought a £100 bond for my son 19 years ago. It didn't win a single penny in all that time. And yet, last year I bought a similar £100 bond for my daughter.

We received a cheque for £50 the other day. Funny how "luck" works out.

"Reece Bythell" wrote

With "average luck", you might expect a 100 bond to win one prize every 25 years or so. Unfortunately, that doesn't mean that your son is likely to win in the next

6 years, as ERNIE has no memory!! :-(

The message from Reece Bythell contains these words:

I have over 15,000 worth and have won 100 (two 50 prizes) in the last 12 months

A friend invested 8k six months later won 1k, only won the odd 50 since.

You pays you money and you takes your chance.

Believe it or not but last year three of the 1 million pound winners only bought their bonds 3 or 4 months prior to winning. I think it was the June, August and September winners.

This months winner was a £3 bond (£17 total) bought in 1959.

Some return, even if you had to wait 45 years.

I have 11,000 at the moment and have won 250 in the last year

While the interest rates are crap it's worth the bet.......but if I was going to get 7% on my 11 grand and could have instant access I'd think again

In message , John Smith writes

Why bother with an experiment. The odds are 1 in 27500 per month for any bond to win going to 1 in 24000 in September. Over the years I have been watching the odds have been as bad as 1 in 30000 and as good as 1 in

19000 and possibly better than that but my memory lets me down. 99.54% of prizes are £50.

If you ARE a winner (i.e. 1 in 27500) then you have a a further 1 in

746566 chance of winning £1m.

Currently 2.6% of the bonds is paid as prizes per year rising to 2.8 and then 3% by October.4% of the prize fund is for prizes in excess of £1000 of whi8ch there are 45 prizes out of 746566.

So, with £30,000 you are likely (but not certain) to win just over once a month, on average over a period of time, and that is likely to be just £50, so a likely GROSS return of 2.7%.

BUT you may win £1000000!!!!!!!!!!! And get your stake back if you dont.

In message , John Smith writes

The statistics appear skewed in favour of recent purchasers but since the minimum and maximum stake was increased it appears that more and more 'big investors' are maximising their holdings which means that more and more of the fund has been bought recently, it is the biggest it has ever been, hence this apparent preference to recent purchasers.

There's still hope, then, for our £40 bought in 1958. Admittedly we did get £250 in 1969, which probably used up our quota of prizes for the next hundred years or so.