Premium bonds looking better

I'll admit I'm not a major fan of premium bonds as unless you hold a large number you are more likely to win nothing at all than one £50 in a year.

However, with the latest cut in the BoE base rate to 1.5% this means that yet again savers lose out as banks and building societies will cut the rates on savings by more than this.

It may be worthwhile as a tempory measure investing some of your savings from your lowest interest account into premium bonds. If you say add £200 into a savings account each month you could switch and buy that number of premium bonds instead.

Each month you stand a chance that each of the bonds you hold could win at least £25. The good point is that you don't lose the capital. When interest rates go back up simply cash them in and put the money back into your savings account.

If you win a prize either bank it or reinvest it in more bonds.

Please note that the maximum amount you can hold is £30,000 worth of bonds and you can only buy them in £100 units or £50 units by monthly direct debit.

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