My Thought On NS&I PREMIUM BONDS | Still Worth It? (2020)

In this video, I will share with you everything you need to know about premium bonds. By the end of it, you will know exactly if this is the right investment for you, or not.
Premium Bonds are an investment product issued by National Savings and Investment (NS&I), which is a government agency that offers saving and investment products to the public.
They’ve been around since 1861, and they are completely back by the British government, meaning that your investments with them are 100% safe!
The way premium bonds works is very similar to the lottery, you open an account with NS&I, and for each pound you deposit, you get 1 bond tied with a number. You can deposit between £25 and £50.000.
It works like a saving account, where you earn absolutely no interest on your money. But, every month you participate in a draw where you can win prices between £25 to up to a million pounds. And all the money you win is entirely tax-free!
However, contrarily to the lottery, if you don't win anything this month, you don't lose your money. Your savings are still there, and your premium bonds will automatically enter the draw every single month. If you want your money back, you can withdraw at any time!
If you keep your money in premium bonds long enough, statistically speaking, you should average around 1% in return. This is precisely what they are advertising on their website, and if you get lucky, you can make even more. Still, if you are unlucky, in some instances, very unfortunate, you could end up not making any profit. Because virtual certainty means 99.99999%, it does not mean 100%. So keep that in mind, if you believe that all the bad things only happen to you.
I believe that premium bonds are a terrible long term investment, because with an average return of 1%. You will not even beat inflation, meaning that your money will lose its value over time. Investing in premium bonds for your children or grandchildren is a complete non-sense. Also, they are definitely not the best way to become rich.
However, I also believe that premium bonds are the perfect place to keep your emergency fund, especially in 2020, because 1. It’s safe, 2. The returns are tax-free, 3. you have easy access to your money 4. Odds are that you will have a higher return than keeping your money in a traditional easy access saving account, 5. You reduce your chances to spend your emergency fund because you know that the more you will keep your money there, the more opportunities you have to win. This is why 21million people in the UK have on average £4000 worth of premium bond, nobody every withdraws their money, because they could miss out on the next draw. 6. It’s more fun. I mean this is a healthy form of gambling.
We all like to dream about what we would do if we would win the lottery, and this is precisely the experience that you get with premium bonds. Knowing that the more you can save the more real that dream can become is in itself an excellent motivation to save. In addition to that, it is way more exciting to wake one morning and see that you won £50 than seeing in your statement the exact interest rate each month!
Now if you are struggling to save money and don't have an emergency fund, then click on this video.
https://youtu.be/MEhr4sN3jNc
Where I share with you how I manage to save money every month and not spend it. This way, you too can replicate my results and enjoy the feeling of financial security. So click right now, and I will see you over there!
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Видео My Thought On NS&I PREMIUM BONDS | Still Worth It? (2020) канала Reda Harras - Personal Finance