Premium bonds are terrible
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Your 2-minute guide to demystifying money and making you richer
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Premium bonds, and why they are bad
Whenever someone starts talking about premium bonds my blood pressure goes up. It’s always the same: “My friend won £10,000 on the premium bonds!”
So, are premium bonds a good investment?
No.
No, they are not.
Premium bonds are neither “premium” nor “bonds” and smart investors stay the hell away from them.
Premium bonds are based on false advertising
Premium bonds are actually a monthly lottery run by the National Savings & Investment bank. You buy a “bond” from NS&I for a minimum of £25 and the government pays interest to NS&I — not to you — on the money collectively “invested” in premium bonds.
Currently, that interest rate is 4.4%. Which doesn’t sound too bad. But that interest isn’t going to you, the per…
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