Does the NS&I offer a similar product but with a guaranteed 4.4% yield or something?
I get the idea of premium bonds is to take advantage of people’s risk taking preferences and futile hope (that make poor people buy lottery tickets) in order to encourage good saving habits, but from a financial perspective the additional risk with no additional reward that you get when you go from guaranteed to randomised return is the opposite of a free lunch.
Hi Matt. The ‘flagship’ NS&I account, the ‘Direct Saver, account offers a 3.75% rate at the moment (it’s just reduced as rates have come down). This is a traditional cash account, so the interest paid is taxable.
Ironic in my experience that people who regard themselves as risk averse, and who avoid global equities like the plague, will pile into Premium Bonds with their cash savings, when there is no guarantee of any kind of decent return.
Does the NS&I offer a similar product but with a guaranteed 4.4% yield or something?
I get the idea of premium bonds is to take advantage of people’s risk taking preferences and futile hope (that make poor people buy lottery tickets) in order to encourage good saving habits, but from a financial perspective the additional risk with no additional reward that you get when you go from guaranteed to randomised return is the opposite of a free lunch.
Hi Matt. The ‘flagship’ NS&I account, the ‘Direct Saver, account offers a 3.75% rate at the moment (it’s just reduced as rates have come down). This is a traditional cash account, so the interest paid is taxable.
Ironic in my experience that people who regard themselves as risk averse, and who avoid global equities like the plague, will pile into Premium Bonds with their cash savings, when there is no guarantee of any kind of decent return.