Premium Bonds after a year: Were they worth it?
TLDRIn this video, the creator shares his experience with premium bonds over a year, comparing their performance to that of a best easy access savings account. After investing £10,000 in premium bonds, he earned £100 within six months, matching the interest he would have made from the savings account. Despite not winning any significant prizes in the following six months, he remained satisfied with his returns and provided insights on the unpredictability of premium bonds versus the fixed interest of a savings account.
Takeaways
- 📈 The speaker invested £10,000 in Premium Bonds on January 31, 2021, for a one-year period.
- 💰 The interest rate for the best easy access savings account at that time was 0.55%, yielding £55 in interest for £10,000 over a year.
- 🎟 Premium Bonds offer a chance to win prizes rather than a guaranteed interest rate, with a minimum prize of £25.
- 🗓 To be eligible for the prize draw, the money must be invested for a full calendar month before entering.
- 🏆 After 11 prize draws, the speaker won a total of £100, mostly within the first six months.
- 🌟 The speaker's experience with Premium Bonds outperformed the best easy access account rate of 0.55% in the first year.
- 📊 As of the time of the video, the best easy access account rate improved to 0.71%.
- 🔄 The speaker added more money to Premium Bonds during the summer and won a £25 prize from this additional investment.
- 🎲 The outcomes of Premium Bond prize draws are unpredictable and depend on luck.
- 📝 The speaker plans to continue monitoring and reporting on savings rates and Premium Bond performance in future updates.
- 📈 The decision to stay invested in Premium Bonds or move to other savings options should be reevaluated based on changing interest rates and personal financial goals.
Q & A
What is the main topic of the video?
-The main topic of the video is a personal review and comparison of Premium Bonds and easy access savings accounts, based on the creator's experience with Premium Bonds for a year.
How much money did the creator invest in Premium Bonds?
-The creator invested 10,000 pounds in Premium Bonds.
What was the interest rate for the best easy access savings account available at the time of the creator's investment?
-The interest rate for the best easy access savings account at the time was 0.55%.
How much interest would the creator have earned in a year with the savings account, based on the given interest rate?
-The creator would have earned 55 pounds in interest from the savings account in a year.
What is the minimum prize amount for Premium Bonds?
-The minimum prize amount for Premium Bonds is 25 pounds.
How often are Premium Bonds prize draws held?
-Premium Bonds prize draws are held monthly.
What was the total amount won by the creator in Premium Bonds after one year?
-The creator won a total of 100 pounds in Premium Bonds after one year.
How many prize draws did the creator participate in during the year?
-The creator participated in 11 prize draws during the year.
What is the current best easy access account interest rate mentioned in the video?
-The current best easy access account interest rate mentioned in the video is 0.71%.
What is the creator's conclusion about investing in Premium Bonds compared to easy access accounts?
-The creator concluded that based on their experience, Premium Bonds outperformed the best easy access account in terms of returns during the first year. However, they also noted that there's no guarantee of the same luck in the future and advised viewers to stay updated on the best rates for their savings options.
What is the significance of the date 31st January for the creator's Premium Bonds investment?
-The significance of the date 31st January is that it allowed the creator's money to be entered into the prize draw starting from March, as Premium Bonds require a full calendar month of investment before eligibility.
Outlines
💰 Investing in Premium Bonds: A Year in Review
The speaker discusses their experience with premium bonds over a one-year period, comparing the returns to a best easy access savings account. They invested £10,000 on January 31, 2021, and received 11 prize draws, resulting in £100 in winnings. This amount was more than the £55 they would have earned in interest from the savings account at a 0.55% interest rate. The speaker also explains the importance of investing at the end of the month to be eligible for the prize draw early in the following month. Despite not winning any big prizes, they were satisfied with the outcome, especially considering they received most of the winnings within the first six months.
📈 Premium Bonds vs. Savings Accounts: A Comparative Analysis
The speaker continues their comparison of premium bonds to easy access savings accounts. They recount their winnings over the year, noting that the initial £10,000 investment yielded £100 in prize money, surpassing the interest that would have been earned from a savings account. The speaker also considers the current best easy access account interest rate of 0.71%, suggesting that the premium bonds still offer a potentially better return if one continues to win prizes. They acknowledge the unpredictability of the returns and advise viewers to stay updated with monthly savings updates and consider re-evaluating their investment strategy based on the performance of savings accounts.
Mindmap
Keywords
💡Premium Bonds
💡Interest Rates
💡Easy Access Savings Account
💡Prize Draws
💡Returns
💡Investment
💡Risk
💡Financial Comparison
💡Savings
💡Lottery
Highlights
The speaker has been investing in Premium Bonds for a year and is providing an update on their performance.
The comparison is made between the returns from Premium Bonds and the best easy access savings account available at the same time.
The initial investment was £10,000 on the 31st of January 2021.
The interest rate for the best easy access account at that time was 0.55%.
The speaker would have earned £55 in interest from the savings account over the year.
Premium Bonds do not guarantee any winnings, but the speaker only needed to win twice at £25 to match the savings account interest.
The importance of the investment date is highlighted, as the money needs to be invested for a full calendar month to be entered into a prize draw.
The speaker had 11 prize draws over the year, with the 12th one coming up in February.
The speaker did not win any prizes in the first draw in March 2021.
By April 2021, the speaker had won £25, and by May, another £25, totaling £50.
In August, the speaker won two more prizes of £25 each, reaching a total of £100 by the sixth month.
The speaker won a £25 prize in September, but it was from an additional investment made in the summer, not the initial £10,000.
In November and December 2021, the speaker won another £25 prize each, but none from the initial £10,000 investment in the last six months.
Over the year, the speaker made £100 from the Premium Bonds, matching the best easy access account interest rate at the time.
The speaker did not win any big prizes but is satisfied with the outcome.
The current best easy access account interest rate is 0.71%, and the speaker would need three wins to beat it in the next 12 months.
The speaker plans to continue providing updates on savings rates and the performance of Premium Bonds.