I'm undecided about Premium Bonds.

For quite a while now, I've considered them to be a poor investment, given that the interest rate isn't all that good, and that some of the mediocre interest rate goes to paying the larger prizes which I would almost certainly not win.

The possibility of winning a largish cash prize, though, is quite appealing!

I've been wondering, those folks who have PMs, what percentage of their overall savings do they represent?

I have 30K for about 4 years now. Being doing worse than if I had the money in a decent savings account but I like the idea of having a chance at a mill. Probably will remove all my money in the next few months and either take out fresh bonds or put it into savings.

Over the 4 years I am down several thousand so it is not making sense anymore.

I'd rather put it in a savings account, and use half the interest earned to buy some lottery tickets - that way you've still got the gamble excitement and also some interest on what you've put away.

Frankly, I don't know how the PB people get away with that shoddy deal they offer. It's beggars belief it really does. I think I'm right in saying the odds even with £30K invested are probably really unlikely of winning a significant prize, yet people still shove their money in there. Well, maybe if you're a lucky type, perhaps it works for you...

A couple of points:

I presume you are a higher rate tax payer. If not, stay well clear.

It is a defensive play, so don't stick all your money in it unless you are very risk averse.

Mrs M and I both have PB's. They have paid out an equivalent of a 10% bank account (ie before tax). Steady, but a bit boring.

I've got a hundred quid's worth and have had them for just over a year now. Last time I calculated the odds my chances of winning ANYTHING in a year were 5% (4.1% of that being the minimum £50 prize). So unsurprisely I haven't won a bean. But hey, it's better than keeping £100 in my mattress (probably)

A 10pc return on PBs is the sort of boredom many people would be very happy for.

From my reading on this, only a small number of you achieve that, the majority seem to get sub 3pc or in some cases near 0 on the max holding!

Sorry. I didn't make myself clear. My actual return has been a tax free 6%. In order to achieve that in a bank I would have needed 10%.

The figure would have been lower, but I won a £1,000 prize last year. Prior to that we were probably slightly down, though our returns have been better recently.

I like the tax free element, because it's one less thing I have to dig out when filling in my tax return.

Yes I agree re the tax free, if you're fortunate enough to win. Well done and lots more big wins for you I hope.
(My own luck with £20K then £30K then £10K of various different batches of PBs over many, many draws was dastardly.)

More Dastardly than Muttley, then?

(I'll get me coat...)