BOOM: Premium Bonds

[WTFH]

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.

That's if you're focussed on a single large prize. It's like my sister in law who swapped hers so they were all the same number range because she said it meant she won more often.
Some people really don't get it.

It's tax free, instant access with no penalties.
In fact, it's a really good place to have your warchest.

[woody1]

That's if you're focussed on a single large prize.

Although I dream of winning a big prize, the reality is the odds of winning the £5000 prize, or above, during your lifetime are incredibly slim.

Mostly I just treat it like a savings account, and accept that the return is likely to average around 80% of the fund rate (currently c. 3.7% or £150/month on £50k).

Even as a non-taxpayer that's pretty good for instant access. You can only do significantly better by tying the money up.

If you're a 40% taxpayer, it would be hard to beat 3.7% net even by tying the money up.

[Snooky]

If you're a 40% taxpayer, it would be hard to beat 3.7% net even by tying the money up.

You can easily get 5.2% with instant withdrawal, that's £750pa extra on a £50k investment. I'm going through an MVL and have put the large initial distribution in a 5.2% interest account with Coventry BS. You can get higher rates by tying the money up more.

See https://www.moneysavingexpert.com/sa...best-interest/ for examples

[woody1]

You can easily get 5.2% with instant withdrawal, that's £750pa extra on a £50k investment. I'm going through an MVL and have put the large initial distribution in a 5.2% interest account with Coventry BS. You can get higher rates by tying the money up more.

See https://www.moneysavingexpert.com/sa...best-interest/ for examples

I didn't realise you could get as much as that instant access.

However, the 3.7% with PBs is equivalent to 6.17% net of 40% tax.

Having said that, it's a close call because the return on PBs is not guaranteed. (We've achieved far less than 3.7% this year.)