Savings account vs. Prize Bonds

Blue Crystal

The amount of DIRT I pay is sickening and would encourage anyone to keep their cash in barrels somewhere in the desert; currently getting 2% from rabo on an instant access account.

Looking at prize bonds, the winnings are tax free, and some people do well with them, i realise its pure luck, but with no risk and any return above 1.4% (what im getting after tax in in interest) being acceptable, are prize bonds a good idea?

detective

I know two people who both have about €5000 worth of prize bonds. One of then has got €200 in prizes two years running which is obviously €400, the other got €50.

Mort5000

Blue Crystal wrote: »

are prize bonds a good idea?

Yes, if you like lending the government money for free with a guaranteed negative return.

pjordan

The accounting/investment logic on prize bonds is that they pay out on average 2% in prizes effectively meaning, if you are lucky you can win +or - 2% of your investment DIRT free. Of course some people are luckier and win more and some never win at all.

I have about €6k of prizebonds and have "won" €250 in prizes this year so far which makes it in my reakoning makes 4.1% interest which is better than the best earning deposit a/c even before dirt

But that said one mightn't always be so lucky!

matt-dublin

Are you saying you can lose 2%?

I thought prize bonds were risk free?

pjordan

matt-dublin wrote: »

Are you saying you can lose 2%?

I thought prize bonds were risk free?

Sorry should have read average of 2%. Prize Bonds retain their face value forever but don't take account of inflation so if yer not winning prizes and inflation is running at 2% then I suppose you are losing 2%

mrsdewinter

This is a bit off-topic but I just opened an envelope from the Prize Bonds office and I see that I've won €50.
Don't wish to appear ungrateful but I thought the minimum prize was €75.
What gives?

matt-dublin

mrsdewinter wrote: »

This is a bit off-topic but I just opened an envelope from the Prize Bonds office and I see that I've won €50.
Don't wish to appear ungrateful but I thought the minimum prize was €75.
What gives?

They changed them this year

pjordan

mrsdewinter wrote: »

This is a bit off-topic but I just opened an envelope from the Prize Bonds office and I see that I've won €50.
Don't wish to appear ungrateful but I thought the minimum prize was €75.
What gives?

Yep, they changed them earlier this year. Prize fund is based on or at least related to the prevailing EU interest rate and it was reduced to 2% which resulted in a revamp of the prize structure meaning more €50 prizes instead of less €75 prizes. The bigger prizes were also restructured but the prize fund overall was reduced