Re: Premium Bonds
Originally Posted by ruthio
Well you can either scroll through all your bank statements for the last 12 months to see what your total winnings are . . .
So for example if you've got £2,000 of Bonds and you've won £50 during the year, then your return on your £2,000 is 2½%.
Sorry Ruthio but the numbers are not as simple as this. You can't "cherry pick" a specific point in time where you won prizes. To assess whether your premium bonds are a good or bad investment you need to do the calculation on the total number of bonds you won and crucially the total period
that you have owned them in conjunction with the total amount of prizes you have won.
There is a simple calculator here that people can use:
Premium Bonds Investment Return Calculator
The odds of winning a £50 prize are apparently 24000:1 so the basic odds tell me that Premium Bonds are certainly NOT a great investment. They are much like the National Lottery.
The prize money for all the basic prizes is far far too low for the odds of winning those prizes.
e.g. If it costs you £1 to place a dice bet and you win £3 every time you roll a 6,
Then the astute should immediately see that this is a "sucker bet". On average a 6 will come up every 6th roll. So you will have paid £6 for those 6 rolls yet you only win £3. Hence it is a losing proposition.
The National Lottery odds for matching 3 numbers used to be 54 to 1 (when there were just 49 numbers) and the prize for that was a mere £10. Hence a total sucker bet.
The only prizes of any merit are the really big ones and the odds of winning one are astronomically against you.
Overall Premium Bonds exist to remove money from the element of the populous that is either lazy, or which doesn't understand basic odds, or which are just dreamers or all of the above.
You are literally handing your cash over to a bloke you have never met so that he can go and invest your money on real
prospects which will generate a good return for him
whilst he gives you pretty much NOTHING back in return.
It is only the way the entire thing is wrapped up and presented that makes people think it is something else.