Savings Account or Premium Bonds?

I have premium bonds. I was puirchasing them to pay for my funeral, with the added bonus that I could cash them in if i had a financial crisis, also chance to win some cash. I have won a few £25 but nothing bigger. I then found the online company where you pay up front for a basic cremation, no mourners, no service just removal of body, cremated and ashes returned to NOK. So Premium bonds can be used by my family to enjoy once I leave them.

I would say longer term as in 10 years or more, rather than medium term which is perhaps 5 years. Stocks and shares have been doing well for the last ten years since the 2008 crash, and that is historically a long time, so we are now overdue for another crash. If you need that money within the next five years probably premium bonds or cash isa, cash savings account are better, but if you are not looking to cash in for another 10 years plus then stocks & shares are the way to go. You can easily get 4% annual dividend income from conservative investment trusts.

Also don’t invest any money you can’t afford to lose. If it’s money you can’t afford to lose then you shouldn’t be investing it, you should be putting it in premium bond, cash ISAs, savings accounts.

I wish I went for Stocks and Shares ISA.!!
Anyway, second best thing - I’ve given quite a bit to each of my 3 children - they’re young and need the money now, rather than later.

We invested quite a large sum in premium bonds and we have " won " £25

Good advice ShropshireMiss ?

With a stocks & shares ISA you’ve got to understand that in a crash the funds and investment trusts in the isa wrapper could easily halve in value and stay like that for years, then 10 or 15 years later they may emerge at twice what you originally invested. That was my experience of the 2008 crash, and another crash is probably overdue by now.

My BinL had £9,000 in premium bonds - profit from a flat sale and looked after for him as he is special needs. He won 3-4 prizes a year...so either luck of the devil or you don't need to invest as much as you think.

Sorry, should have said, we are also about to buy some for our Grandson each month, instead of placing money in his money box as we want to place money where his father cannot get it. Most children's accounts seem to need a parent to be signee- so no use to us...as he would pressurise my daughter

Three to four £25 prizes a year is probably about right, as the chances of each £1 unit winning are currently 34,500 to one, for each monthly draw, and there are twelve draws each year.
With £9,000 in bonds if he wins three prizes a year so £75 that would be approx 0.8% ‘interest’; while if he wins four prizes a year so £100 that would be approx 1.1% ‘interest’.

Premium Bonds - I have a lot less than £40k mentioned by Charliegirl5, but I put monthly savings in and reinvest wins. I get several £25s a year. In January had two winning bonds £25 each.
When inflation is high there is a risk that cash value will be lost, but with current interest rates so low, I’m happy with my regular wins.

Husband and I are quite happy with what we have won over the years
About six months ago found a extra£25 in bank account. Another mid month win!!!
Some days later got letter to say second draw as some of the winners had not been valid. Cashed in???? And I had won extra one. Hence the £25.

DH won £500 once on PBs. You would have thought he’d won Euromillions. .

I've got a couple of Regular Saver accounts with First Direct and NatWest, admittedly, the nature of the accounts means you can only deposit between £50 & £300 to each account each month but they are paying 3.5% and 3.25% respectively.
I appreciate you can't put your lump sum into these accounts but you could move it to an Instant Access account somewhere paying 1% or a bit more if you can find one and move £300 to each every month.

I forgot to say that I've had pbs for several years and have never won a thing, so I'm now cashing them in and depositing the cash into the above-mentioned accounts.

I've just checked MSE and Chase is offering an instant access account at 1.5% (max deposit £250,000).

@Treetops05

You can open accounts for your grandsons if you have access to their birth certificates. It's done in the same way as a parent doing it. My mother did it for one of my sons but not the other.

I have £500 in premium bonds and have won about the same over the 30 years I’ve had them. Very recently followed Martin Lewis and transferred savings to Chase for 1.5% easy access, 1% on card spending and 5% round up. Also opened a First Direct current account with £150 joining reward for direct debits and income payments. I just keep my eye on both accounts and ‘team and ladle’ as necessary. Used bank switching service so went smoothly

1.80 % at Marcus Goldman sacs for 1 yr fixed . I have had max premium bonds for three years & my return was just over 1% each year winning one two or three £25’s most months . Cashed them in this year to do something else

Thanks DeeJays mum. Just read your post and it's very helpful

Spend it!! Money languishing in a bank account represents missed opportunities for adventure.

Chestnut

I have some money languishing in an ISA which only pays 0.05% interest, so I want to transfer it somewhere else. I can't decide whether to put it in a savings account offering 1.25% interest or dump it into Premium Bonds. Anyone here savvy with money?

Check MoneySavingExpert.com where there's a calculator to see how much you have to have in Premium Bonds to get a return - even if you have the full £40k you get very little back. Even though 1.25% is very low you'll probably get a better return. Or speak to an IFA who can help you find the best way to invest

I keep a spreadsheet of my PB wins. Last five years..... 5 this year so far, 14, 20, 27 and 18. Two of these have been £500, the rest £25. Never forgave Gordon Brown for halving the £50. I have the maximum hold but love the gamble aspect. As for Cash Isa, I do a fix term but never longer than a year these days. Best I can see at the moment is 1.8%

We have done quite well with bonds but you do seem to need the max amount in them before getting a return. I also think it's a bit more exciting checking the results each month than a boring savings account.

We haven't got the max in Premium Bonds but do reasonably well. This month we have won £100 between us. I can't think of anywhere you would get interest like that on savings.