Michael Hunt Posted January 10, 2006 Share Posted January 10, 2006 anyone help how long does it take to aquire premium bonds ? is it best to buy them at the end of the month i understand if you buy at the beggining of the month youll have to wait 8 weeks before the first draw and would lose interest if you had withdrew the money from your 5% account ? any takers Quote Link to comment Share on other sites More sharing options...
OzzMosiz Posted January 10, 2006 Share Posted January 10, 2006 anyone help how long does it take to aquire premium bonds ? is it best to buy them at the end of the month i understand if you buy at the beggining of the month youll have to wait 8 weeks before the first draw and would lose interest if you had withdrew the money from your 5% account ? any takers Best bet is too open an account with 100 quid, then move money in after its set-up. Takes a bit to get first premium bonds, just over a week. Next lot took about 4-5 days. Not sure about the timing of buying for the next draw though! Quote Link to comment Share on other sites More sharing options...
Michael Hunt Posted January 10, 2006 Author Share Posted January 10, 2006 Best bet is too open an account with 100 quid, then move money in after its set-up. Takes a bit to get first premium bonds, just over a week. Next lot took about 4-5 days. Not sure about the timing of buying for the next draw though! good idea thanks for that Quote Link to comment Share on other sites More sharing options...
Guest STR2004 Posted January 10, 2006 Share Posted January 10, 2006 The rules are on the NS&I website but are a bit confusing. I have £30Ks worth and could have done with the same advice. Essentially your bonds aren't in the next months draw after you buy them. So if you buy on February the 1st you have to wait until April 1st to be in a draw. I bought mine over the phone with a debit card (had to clear the amount with the bank first) and so buying them was instantaneous. The best approach is to buy as near to the end of the month as you dare as then you don't lose much interest and only have to wait 1 month and a few days to be in a draw. Anyway, hopefully this makes sense? Regards STR Quote Link to comment Share on other sites More sharing options...
Michael Hunt Posted January 10, 2006 Author Share Posted January 10, 2006 The rules are on the NS&I website but are a bit confusing. I have £30Ks worth and could have done with the same advice. Essentially your bonds aren't in the next months draw after you buy them. So if you buy on February the 1st you have to wait until April 1st to be in a draw. I bought mine over the phone with a debit card (had to clear the amount with the bank first) and so buying them was instantaneous. The best approach is to buy as near to the end of the month as you dare as then you don't lose much interest and only have to wait 1 month and a few days to be in a draw. Anyway, hopefully this makes sense? Regards STR that does make sense thats my understanding of they try to confuse so they can hold your money longer and the interest ,same applies when cashing them in straight after the draw! Quote Link to comment Share on other sites More sharing options...
TimD Posted January 10, 2006 Share Posted January 10, 2006 They have to have a months grace otherwise you could buy the day before the draw, be entered for the draw, then sell the day after the draw. Think of the prize as monthly interest that sometimes you get sometimes you don't. I've always bought just before the end of the month to try and give myself of extra interest. I have just cashed in some bonds and bought Apple shares this morning Cheers, Tim. Quote Link to comment Share on other sites More sharing options...
aclwalker Posted January 10, 2006 Share Posted January 10, 2006 Thanks for reminding me. Yes, I planned to buy the minimum amount to start with near-ish the end of the month to minimise the dead time. Do you require the usual 'proof' (as if) of identity and address mularky? If so, can you go into a post office and and do it over the counter and therefore not let them out of your sight? Quote Link to comment Share on other sites More sharing options...
ShirtyTheSlightlyAggresiveBear Posted January 11, 2006 Share Posted January 11, 2006 Heres how it works, Sign up with the minimum, say £100 towards the end of the month. It will take up to 2 weeks for them to process your application and send you your fist bond certificate. It may take longer if they dont accept your application at face value, i.e you need to send further proof of identification along, though generally they say that they ask for it but they dont it appears. You need to hold any particular bond for 1 'full calendar month' before its entered into the draw, it stops flipping of the bonds from month to month. Once you have received your application and bond back, then wait until the end of the month to maximise interest on the money. Then on the last day of the month, invest what ever you feel comfortable, but do it online, it easy enough. The way it seems to work is as long as the purchase date is before the end of the month they honour that date, even if they take a week or so to actually get around to taking the money from your account. A few things to remember though... - You can get your investment back anytime, via BACS I believe within a week. Best time is just after a draw. - They dont publish the majority of winning results until the 3rd of the month, not sure if you cash them in before this date if you are in the draw or not. - Any winnings are mailed as 'crossed warrants', basically cheques. They dont appear in your post box until week 2,3 or so in a month. Higher value prizes apparently turn up quicker. So you have to factor in lost interest during that lag. Can be a pain to cash cheques every month. - You must be prepared to have months with no winnings whatsoever, it happens. - Any winnings are free of any capital gains tax. Useful for higher income tax payers as an alternative to bank interest. - Not technically backed by the FSA compensation scheme, though they do say as a government run scheme the likliehood of it going wrong and not being honoured is almost zero, almost. - Your investment is eroded by inflation. - You generally need a large sum (i.e maxed out at 30k) to play the odds of winning at least 1 prize each month. Basically think of it as a safe alternative to leaving it in the bank, and not paying any tax on the interest. The returns may not be that good, but as long as it beats inflation or what you would of got in the bank its ok. Anyway, its something to look fwd to at the start of each month, hoping that a nice person who turns up on your doorstep with a large cardboard cheque for a million quid! Hope this helps, good luck! Quote Link to comment Share on other sites More sharing options...
non-FTBer Posted January 13, 2006 Share Posted January 13, 2006 Isn't the averaged return on premium bonds only 2.67% or therabouts?? Aren't you effectively lending the government money?? Unless you strike a big win then its not a particularly good place for your money, as the average punter will struggle to keep up with the CPI inflation rate. Quote Link to comment Share on other sites More sharing options...
beerhunter Posted January 13, 2006 Share Posted January 13, 2006 (edited) Isn't the averaged return on premium bonds only 2.67% or therabouts?? Aren't you effectively lending the government money?? Unless you strike a big win then its not a particularly good place for your money, as the average punter will struggle to keep up with the CPI inflation rate. According NS&I, the average return is currently 3% tax free, which means for a 40% tax payer it's equivalent to 5% before tax. Over a short term, your right, you would probably do better with a normal savings account paying above 5%. If you can invest up to the 30k limit over a long period (say 5+ years), you should on average gain the equivalent to 5% interest before tax, but also you have a small chance of winning more (and similarly you have a chance of winning less). Edited January 13, 2006 by beerhunter Quote Link to comment Share on other sites More sharing options...
erd Posted January 13, 2006 Share Posted January 13, 2006 Something like 10% goes into the top prizes, I wouldn't count that money as chances of winning it are next to nothing. Another 10% goes into the range that would give you a prize every five or so years on average. So around 2.7% sounds like the actual rate you should get, if you leave the money there long enough. Of course, you could get lucky! Quote Link to comment Share on other sites More sharing options...
beerhunter Posted January 13, 2006 Share Posted January 13, 2006 Something like 10% goes into the top prizes, I wouldn't count that money as chances of winning it are next to nothing. Another 10% goes into the range that would give you a prize every five or so years on average. So around 2.7% sounds like the actual rate you should get, if you leave the money there long enough. Of course, you could get lucky! Your right, 3% is in theory what you would get if you left the money there forever. Actually (from the link I provided above) - 7% of prize fund is used for prizes between £5,000 and £1,000,000. - 6% of prize fund is used for prizes of £500 and £1000 - 87% of prize fund is used for prizes of £50 and £100. and (if my maths is correct) the chance of winning each prize (each month with a maximum of £30,000 invested) is £1,000,000 is 1 in 488882 £100,000 is 1 in 162961 £50,000 is 1 in 75213 £25,000 is 1 in 39111 £10,000 is 1 in 15520 £5,000 is 1 in 7760 £1,000 is 1 in 556 £500 is 1 in 186 £100 is 1 in 16 £50 is 1 in 0.847 So after 5 years (60 draws), you should get some £50 / £100 wins, and if lucky (1 in 3 chance I think) maybe a £500. Ignoring the £1000 and higher prices, that would give a return of 2.72%, as you said. Quote Link to comment Share on other sites More sharing options...
Badger Posted January 16, 2006 Share Posted January 16, 2006 (edited) Everyone I know with max premium bonds (inc me) finds that winnings are frequent to start with, and unfailingly win one or two prizes a month but they then start to tail off gradually. I've been advised to cash mine in and re-buy them, therefore increasing the likelihood of winning. Doesn't sound very 'random' to me - I'm sure the software is weighted so people think they're onto a good thing at first & tell all their friends to buy p bonds too. Any one else experienced this? Also woman in bank when I took in £150 winnings one month said loads of people had had prizes that month, all from the same town.. Edited January 16, 2006 by Badger Quote Link to comment Share on other sites More sharing options...
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