BOOM: Premium Bonds

[woody1]

Not if you’re a higher rate tax payer and want easy access to the money.

True.

[pr1]

Expected value for past 12 months (for £50k) is £1800 using data from https://www.nsandi.com/historical-interest-rates

I've "won" £1475, so have effectively had an average 2.95% [tax free] interest rate and contributed £325 to those lucky millionaires. My turn next month though

date	PB rate	EV	"Win"	"Win" %
Dec-22	2.20	£91.67	£50.00	1.20
Jan-23	3.00	£125.00	£175.00	4.20
Feb-23	3.15	£131.25	£100.00	2.40
Mar-23	3.30	£137.50	£100.00	2.40
Apr-23	3.30	£137.50	£0.00	0.00
May-23	3.30	£137.50	£300.00	7.20
Jun-23	3.30	£137.50	£0.00	0.00
Jul-23	3.70	£154.17	£50.00	1.20
Aug-23	4.00	£166.67	£225.00	5.40
Sep-23	4.65	£193.75	£150.00	3.60
Oct-23	4.65	£193.75	£300.00	7.20
Nov-23	4.65	£193.75	£25.00	0.60
av|sum	3.60	£1800.00	£1475.00	2.95

[AtW]

£400, not too shabby.

[AtW]

£175

[Uncle Albert]

Expected value for past 12 months (for £50k) is £1800 using data from https://www.nsandi.com/historical-interest-rates

I've "won" £1475, so have effectively had an average 2.95% [tax free] interest rate and contributed £325 to those lucky millionaires. My turn next month though

Past 12 months for me was exactly £1800, MrsAlbert got £1850 so pretty much bang on the "expected value".

[TheDude]

£200 on a £20k investment.

[woody1]

We've had pretty rubbish returns this year (on 2 x 50k). Fair few zilch months, and the odd 25/50 and occasional 100.

We did better when the interest rate was pants.

[woody1]

(Assuming max £50k holding)

For those like me, who are always hoping for a biggish win, the odds are not great.

On average, you stand to win:
the £500 prize every 3.5 years
the £1000 prize every 11 years
the £5000 prize every 113 years
etc.

If you only ever win the common £25/£50/£100 prizes, then the effective interest rate is 3.72% (80% of the 4.65% fund rate).

NB. figures derived from https://www.nsandi.com/get-to-know-u...ize-allocation

With £50k holding, the odds of winning a given prize every month are:
£100.......0.96%
£50.........0.96%
£25.........0.42%
£500.......0.023%
£1000.....0.0077%
£5000.....0.00074%

[WTFH]

(Assuming max £50k holding)

For those like me, who are always hoping for a biggish win, the odds are not great.

On average, you stand to win:
the £500 prize every 3.5 years
the £1000 prize every 11 years
the £5000 prize every 113 years
etc.

That's to win 1 of those. It's possible to win multiple smaller values each draw.

With £50k holding, the odds of winning a given prize every month are:

£500.......0.96%

£500.......0.023%

Which one is it?

[woody1]

That's to win 1 of those. It's possible to win multiple smaller values each draw.

Or none.

Bottom line, it's difficult to average more than 80% of the fund rate in the long run because of the extremely low odds of winning larger prizes which account for 20% of the money paid out.

Which one is it?

Sorry, it should have been:

£50.........0.96%
£500.......0.023%