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Are Premium Bonds worth their salt?

It seems the nation’s favourite fun savings product is not enjoying the best of times.

National Savings & Investments (NS&I) has announced that it is to reduce the number of large prizes Premium Bond holders can win each month.

premium-bondsThe number of £100,000 tax-free monthly prizes up for grabs will reduce from three to two, the £25,000 winners from 11 to nine and the £10,000 from 31 to 23.

A bond holder may still be eligible for one of two £1m bonds, which is a relief, but the odds of winning any monthly prize remain at a staggering 30,000-1.

There are more than 66bn £1 Premium Bonds in the mix which makes them by far the single most popular form of savings in the UK.

But it takes only a moment’s search on the internet to find that many of the more than 22m bond holders are now asking the question: “Are they worth it?”.

Funnily enough, we have been asking the same question for quite some time now which is why we have come up with our own popular savings product which is based on the same grounding as the original thinking behind Premium Bonds.

It’s called our Windfall Bond.

The Windfall Bond, which is actually a variable rate notice account, is unique. It’s based on the same principles of generating growth after a qualifying period (the first full month) by way of monthly prize draw but, with winning odds of 64/1 in the course of the first 12 draws i.e. the first year. 

The breakdown of the Windfall Bond draw ensures there are 13 opportunities to win each month – which equates to 156 in each calendar year. Compare those odds with the Premium Bond. According to the Premium Bond calculator on moneysavingexpert.com, a holding of £10,000 worth of Premium Bonds has a 1/367 chance of winning a £1,000 prize over the course of 12 draws.

Each bond is £10,000 and, unlike Premium Bonds, pays interest at a rate that is linked to the Bank of England Bank Rate, currently paying 0.25%. But the draw structure – 10 prizes of £1,000, two of £10,000 and one of £50,000 greatly enhances the chance of an, erm, windfall.

So that’s good news, isn’t it?

Find out more about our Windfall Bond here or call one of our friendly and highly-trained staff members on 03330 140141.
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