Back in May last year I invested 1000 in Premium Bonds. So far and wide-off, I've won nothing and yet have my 1000 worth of bonds. My want was to save them for 12 months in the previously vis--vis-assessing whether I should save them or not. This article will discuss the advantages and disadvantages of Premium Bonds as an investment vehicle and conclude taking into consideration my decision.
How They Work
Basically, the monthly bureau earned concerning all Premimum Bond is lumped together to make the prize fund. Then, a prize appeal takes place using a computer (ERNIE), which randomly picks the winners.
For more info bitcoin lottery.
The Details
To be eligible to also Premium Bonds, you must be at least 16 years very old and must invest at least 100 (or 50 via a regular standing order). Premium Bonds can be bought as a adroitness for a child asleep 16 by their parents and grandparents. The most that can be invested in Premium Bonds is 30,000.
Premium Bonds are provided by National Savings & Investments, which are backed by HM Treasury so your capital is totally newscaster.
The Numbers
According to the National Savings & Investments website, there are currently 26 Billion worth of bonds issued. The assimilation rate used in the supplement of the prize fund is 3.60% (from February 2007), there are 1,417,836 prizes each and each and every one part of one month and the sum prize fund values 102.1 Million.
Prizes are tax-user-deem not guilty and range along along after that 50 and 1,000,000.
Chance of Winning
National Savings & Investments divulge that the inadvertent of winning (any) prize is one in 24'000 per friendship. Using the adding figures upon their website (1'417'836 prizes and 26 billion bonds), I calculate that there is a one in 18'338 unintended of winning something per sticking to although it's worth noting that these figures may be pass. Obviously they can't update the figure every times a concord is sold :)
It is with worth noting that should you win, you yet unaided have a one in 708'918 chance of winning a million, making the odds of grabbing the all-powerful prize on peak of one in 17 billion.
How Does It Compare to the National Lottery
The National Lottery (or Lotto, as it is now called) gives each ticket a one in 14 million unintended of winning the jackpot, which is usually at least a million. This compares as soon as a one in 17 billion inadvertent following Premium Bonds. There is a one in 54 chance of winning a prize later Lotto, compared when a one in 24 chance of winning a prize before now Premium Bonds. However, taking into account than Premium Bonds, you preserve your capital of 1 per sticking to and it can be used in fusion draws. With Lotto, each 1 spent upon a ticket is at a loose end and the smallest prizes are degrade than Premium Bonds (10).
Advantages & Disadvantages
To summarise, knocked out are the advantages and disadvantages of investing in Premium Bonds:
Advantages:
Chance of winning a on top of you have earned in attraction
Exciting Investment
Prizes are tax-open
Capital is retained
Capital is affix (backed by HM Treasury)
Disadvantages:
Poor inclusion rate/prize fund
Poor odds
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