Premium Bonds

If you have a cheque book, download a form and send it off with a cheque.

I bought 5k's worth three years ago, so far only received two £25 pound cheques.

Buying Bonds online via the NS&I website is perfectly safe and easy.

Once registered, they need your bank info, in order to be able to pay out your winnings , but purchasing bonds is a simple matter of setting NS&I up as a payee on your online banking.

The website itself is decidedly clunky, and urgently needs bringing up to date, but otherwise, it's all quite straightforward.

Good luck!

The NS&I website is fine if a bit clunky. I use a debit card to buy bonds. It didn't occur to me to set them up as an online payee - thanks Dave. I'll do that.

staffy posted:

I am a bit wary of going online and just giving bank details to a faceless  person.

 

It's the modern way...

What I find strange, and indeed both annoying and frustrating, is that banks etc require you to give all sorts of security info to confirm who you are if you call them - nothing at all wrong with that - and if they call you - also nothing wrong with that, EXCEPT that they have no systems in place to prove who they are when they call you and start asking for your id info. Every time I suggest it, it simply falls on non-comprehending or deaf ears. It would be a simple matter for them to hold a couple of key words for each customer, that you can ask them first to reveal to you in some way if they call you (e.g what are  the 5th and 8th characters?). I thought I managed it once with an insurance company, except next time they called me (next day) they insisted the word was an additional one for them to ask of me!!

Harry posted:

The NS&I website is fine if a bit clunky. I use a debit card to buy bonds. It didn't occur to me to set them up as an online payee - thanks Dave. I'll do that.

Yes Harry, it just makes things easier to do from home.

To return to the OP's reluctance to give out bank details, I've never really worried too much about that, since, pre "online" days, we all happily handed over cheques, which, of course, had said info there in black and white..............or am I missing something?

fatcat posted:

If you have a cheque book, download a form and send it off with a cheque.

I bought 5k's worth three years ago, so far only received two £25 pound cheques.

Not a brilliant rate of return there unfortunately.  Assuming 3% increase YoY in a tax free ISA that would equate to £5,463.  Even at a 1% YoY increase you'd have beaten PBs

It's a form of lottery, not interest-paying savings. you could get a large return in a short space of time, or nothing at all. Statistically (IIUC), if you leave your money there indefinitely you will get a return equivalent to whatever is deemed to be the average return or "interest" rate.

With my 2 bonds (£1 each!) that my parents bought for me as an infant in the 1950s and I still have, I had a win of £500 in the early 1980s - so my equivalent rate of return at the time of the win was about 20% pa, and over their whole life to date is about 9%. (Actually a tad more as I think I won £25 in maybe the late 1990s.)

When I bought the 5k of bonds, I did so on the assumption average return was 1.6% (I found that info on the internet so it must be true). At the time that was on a par with a cash ISA.

Presumably the longer I hold onto the bonds, the closer I will get to the 1.6% return. Plus I do have a chance of winning the jackpot.

I am just hoping I can win enough to pay off my daughters mortgage.  LOL.   I have a few thousand set yo one side, if I dont do something soon I will end up wasting it on HiFi. LOL

Thanks guys.

The last couple of years the govt has reduced the rate to about 1%, obviously giving all those billions of QE to the banks mean they can't afford a higher return for the hoi polloi.

It's not so good now. But what is? TBH I'm a bit nervous about holding a lot of UK bonds at the moment. You think it can never happen, but... The Treasury line that they are untouchable and therefore no protection is necessary has always rung a bit hollow but not troubled me until now.

Innocent Bystander posted:

It's a form of lottery, not interest-paying savings. you could get a large return in a short space of time, or nothing at all. Statistically (IIUC), if you leave your money there indefinitely you will get a return equivalent to whatever is deemed to be the average return or "interest" rate.

With my 2 bonds (£1 each!) that my parents bought for me as an infant in the 1950s and I still have, I had a win of £500 in the early 1980s - so my equivalent rate of return at the time of the win was about 20% pa, and over their whole life to date is about 9%. (Actually a tad more as I think I won £25 in maybe the late 1990s.)

This seems insane. So they take a low-yield safe investment, and add a gambling element to make the return to investors volatile and unpredictable, but with a long-term expected yield no higher than the underlying instrument. What is the point of that?

That's how premium bonds work. They always have. You can buy conventional treasury bonds as well, which aren't part of a weekly lottery draw.

I've had two premium bonds since my birth in '57. I've won fifty quid on them (so far). I haven't bought any more premium bonds but I have bought treasury bonds.

It was introduced long before national lotteries, possibly (my guess) to give people a dream after the war years, much as the lottery does today, while providing much-needed funds for Gov't rebuilding the country. IIRC the prize as far back as the mid 1960s was £50k, which is a sizeable some in today's terms.

But unlike the lottery, you can get yourvoriginal investment back!

I might buy 10 grands worth and hope to win.....thats a big hope... enough to help my kids mortgage.   If I dont win anything I can always cancel them and get my money back after ,say three or four years.

Every month someone wins a cool million.    I would be very happy with 100,000.

Seems a complete waste of time and money to me. The returns are in fact negative. Far better putting money into a stocks & shares isa and choose any number of large funds. This will pretty much undoubtably give you good returns, even over a relatively short 5 years.

It gives you the opportunity of being disappointed on the 1st of each month when the Premium Bonds "hander out" person fails to telephone you to make an appointment to handover the £1000000 cheque.

Part of the government service of always micturating you off each month, that way you will always be miserable - after all we cannot have happy Brits can we?

I suspect that most people that have them forget about them, either until they get notification of winning, or they need to recover the funds. And at these times of such paltry low interest rates, possibly likely to fall further, the gamble without risk of losing capital, only losing the miniscule interest each year, may well be more worthwhile than ever. I suppose in part it depends how well you can afford to not have the interest, bearing in mind the cumulative effect, while waiting for Ernie.

ERNIE was the name of the computer that picked the winning numbers when I was a kid! Still might be for all I know.

Electronic Random Number Identification Equipment (or Engine). Quite the cutting edge of technological achievement in the '60s.

If the interest rate drops below zero %  will it mean Premium Bond owners, instead of winning money, will be picked at random to see who pays up?

It would be a bit awkward if you get 'the telephone call' with someone awarding a prize of a one million pounds that you need to pay up now.

Debs

EXCEPT that they have no systems in place to prove who they are when they call you and start asking for your id info.

I'm with Santander any problems they will send a code to your mobile and then ring you back asking for the code but also  recent transactions on your account plus other security related questions before they proceed it took some time but seemed pretty bulletproof to me.

Premium Bonds don't pay interest. 

Treasury Bonds do. And nobody will own them if they start taxing you on the principal. Might as well stuff it in the mattress.

Indeed PBs dont pay interest as such, but the winnings effectively represent same shared out on a different basis - so get rid quick if ever they become negative!

IIRC Spain and Japan have or have had negative interest rates  - and one risk is that people will keep money in less secure places, including ones that start to become a temptation for burglars. 

Negative inrerest loans, however, would be a very interesting prospect ...if only!

Same dealer as me Pete. 

Good move.

Lousy investment but huge fun. Sometimes you've just got to go for fun.

Have lots.