Can anyone explain premium bonds to a numpty

[jimspeed]

OK folks finally sold my house and won't be buying another until I'm fixed enough to get a mortgage again so 6-8 months hopefully.
I should have around 100k clear and don't want it somewhere I can easily pick at it and is safe so someone suggested premium bonds as I could even gain more than interest in the bank would get me...
Pro's cons?? I'm currently stuck in the qe for next 3 weeks so won't be doing much til I'm out and I currently have the thought process of a 5 year old thanks to 12 months of chemo lol..
Go easy on me I'm not switched on enough to invest and would like access to it if something comes up..
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Hyosung cruise 125(passed test on, sold) Kawasaki el 252 (better than expected but sold on) Kawasaki GPZ500S first "big"bike.(sold) ZZR600 E5..Z750 2007,ER5, currently on a 2008 Enfield bullet electra x and loving it..
,"Alpha-9: Is there any correlation between dyno rod and dyno kits?"

[BrownTrousers]

I don't know much about the rates i.e. The odds of winning but I do think they meet your 'safe' and ' easy access!' criteria.

Isn't there a cap on how many you can have though? (and isn't it less than your £100,000)?
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[gdj444]

Limits £50k this year, I will be in a similar position soon so will keep an eye on this thread, in the meantime ....

https://www.moneysavingexpert.com/news/savings/2015/06/limit-rises-to-50000-on-premium-bonds

Jonesy

[Tracey Suntan-King]

As already said you can invest £50k max. Prize fund pays equivalent rate of 1.35% on average which is tax free. Also you can get some or all of your cash out without notice.

However 1.35% depends on you having "average" luck. You could win more or less. Moneysavingexpert has a good calculator to work out your return.

IMO premium bonds are a good place to put £50k for 12/24 months or so as long as you bank your winnings (if any) in another interest bearing account. Otherwise if you just spend it you won't feel the benefit

I wouldn't leave £50k in premium bonds for more than a couple of years though. Inflation, even though it is low at the moment will erode the value of your £50k if you leave it too long.
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[jimspeed]

Cheers guys and lasses
Yes it's only going to be a short term thing I think a year max..
So if I stuck 50 in bonds where would be a good place to put the other 50? Where it's safe and easy ish to get back when I need it. Not that worried about it gaining much interest as it's never going to gain much over the relatively short period I guess.
I don't want to leave it in my current account as it will just whittle away
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Hyosung cruise 125(passed test on, sold) Kawasaki el 252 (better than expected but sold on) Kawasaki GPZ500S first "big"bike.(sold) ZZR600 E5..Z750 2007,ER5, currently on a 2008 Enfield bullet electra x and loving it..
,"Alpha-9: Is there any correlation between dyno rod and dyno kits?"

[doggone]

For just a year or so you will struggle to get much more than 1%, but it's probably still worth doing some kind of fixed term bond (e.g. https://personal.natwest.com/personal/savings/fixed-term-savingsaccount.html ) as you say it stops the temptation to keep dipping in and with inflation near zero at least your sum is actually growing which has often not been the case in the past.

You can get more if you can lock it up for 3 or even 5 years (maybe part of it?)

However if the idea is to put it towards a house, bear in mind house prices have been rising above inflation so you may feel worse off.
In that case using it as deposit is probably a better plan though obvious there may be many personal reasons why that's not realistic right now.

[jimspeed]

[Robby]

Talk to a financal advisor.

You're not going to earn much interest on it, so your primary concern should be keeping the money safe rather than trying to earn much out of it.

I would expect that you're best off putting it in several different places - some in an ISA, some in bonds, some in bank accounts. You might also be able to get 1 year bank bonds where you can't access the money until the term is up but the interest is reasonable.

A while ago one of the banks - I think Santander - was offering a bond where they pay the interest up front, which looked like a a nice bonus for someone that seeks instant gratification.

[BrownTrousers]

£50k in premium bonds doesn't sound too bad in your personal situation.

If you haven't already filled a cash ISA I should think that is a good idea too - its tax free, safe and easy access. Investment limit is ~£15k per tax year so could fill one now then put another £15k in at the beginning of April.

That only leaves you with £20k of your 100 to do something with. It may be that you could afford to put this portion into a slightly longer term (1-2 yr) bond which won't be easy access (but all the rest is, if you need it) but will give slightly better returns.
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[robs321]

50,000 goes at winning a Million quid every month. You never know, your luck?

[Jewlio Rides Again LLB]

Won't it be 5000 goes now, as they're £10?
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[jimspeed]

Oh I didn't know about the isa thing that may be an idea especially if like you say can put 2 lots in effectively . Some of those do give a reasonable return on it too don't they? .
Wish I was clever enough to make it work for me but at present I just want to make sure it's all there available when I need it.
Not sure about tying some up for a fixed term as I would possibly then end up with a bigger mortgage in future till I could release it and I think I may struggle with borrowing too much..
Stuck here in hospital for next 3 weeks and when I get out the sale should be completed so need to start looking and deciding I guess.
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Hyosung cruise 125(passed test on, sold) Kawasaki el 252 (better than expected but sold on) Kawasaki GPZ500S first "big"bike.(sold) ZZR600 E5..Z750 2007,ER5, currently on a 2008 Enfield bullet electra x and loving it..
,"Alpha-9: Is there any correlation between dyno rod and dyno kits?"

[jimspeed]

[BrownTrousers]

[Polarbear]

But as interest rates are stupidly low for savers it's got to be a reasonable short term call.
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[Matt B]

We have around £12k in Premium Bonds and the wife keeps a record of winnings on a spreadsheet. At the moment it's running at the equivalent of 0.5% interest rate so we could get more with a bank. other members of the family hold more (near the £50k) and theirs returns around 1%.

However, Premium Bonds are a great way of separating some money off and storing it safely, away from the banks. Bear in mind that only £85k of your money is protected if the bank goes under, so splitting it is a good option. It can all be managed online now so nice and easy.

Personally I would stick £50k into Premium Bonds and max out a cash ISA. Put the rest into a bank account of your choice and in April max out your next years ISA limit.
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[Ben90]

You could have a look at putting some into p2p lending. Current rate for one year is 4.5% (gross). It's regulated by FCA but not protected by FSCS but the risk is low since your cash is spread between borrowers - it's 'not much riskier than saving at a bank'
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[Ste]

Why are people seemingly only recommending products with low interest rates?

[Tracey Suntan-King]

[Ste]

[Polarbear]

[Tracey Suntan-King]

[Ste]

Fair enough, by all means take financial advice from BCF rather than from banks.

It's not my £100k, I don't care what the OP does with it, if he's happy to just receive a few percent interest on his money then that's his call.

[Tracey Suntan-King]

Based on my sample of (3) IFAs, 100% turned out to be useless dicks.

My empirical research stands.

However, I am not advocating BCF as an alternative to an IFA, obviously.

If you want low risk, short-term investment anyone can do that by looking at best buy tables and refering to websites like Moneysupermarket or
Moneysavingexpert. You can find your own deposit accounts or bonds.

Anything longer term or if specific growth or income goals are required, then some sort of advice is probably needed. If this is the case choose carefully. If you find and are sure of a good IFA then all well and good.

I just never have!
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