The Lemon Fool

The highlight of the month as we move into lockdown is the family Premium Bond prize reveal......

We appear to have used up an above average chunk of our luck with January prizes of £75, £75, £50 and £25 from 4 maximum holdings.

Just counting down the days till the next draw......

I'm a PB noob. Put in £50K and just enjoyed my first chance of a payout today. Result: £75. I've extrapolated from this and figure I'll be buying Microsoft at some stage.

Chris

csearle wrote:I'm a PB noob. Put in £50K and just enjoyed my first chance of a payout today. Result: £75. I've extrapolated from this and figure I'll be buying Microsoft at some stage.

Yes, another month like that and you'll be able to afford a Windows 10 licence

Scott.

FWIW £25k in Premium Bonds held for six drawers and I've £25 won in each of the six drawers. All I need now is one of my regular monthly wins to be £1m...

neversay wrote:FWIW £25k in Premium Bonds held for six drawers and I've £25 won in each of the six drawers. All I need now is one of my regular monthly wins to be £1m...

Early days for me; £15k in play for the last two draws, nothing at all so far

staffordian wrote:

neversay wrote:FWIW £25k in Premium Bonds held for six drawers and I've £25 won in each of the six drawers. All I need now is one of my regular monthly wins to be £1m...

Early days for me; £15k in play for the last two draws, nothing at all so far

OMG just noticed that in haste I had typed drawers instead of draws.

It's probably time to take a tea break.

neversay wrote:

staffordian wrote:

neversay wrote:FWIW £25k in Premium Bonds held for six drawers and I've £25 won in each of the six drawers. All I need now is one of my regular monthly wins to be £1m...

Early days for me; £15k in play for the last two draws, nothing at all so far

OMG just noticed that in haste I had typed drawers instead of draws.

It's probably time to take a tea break.

I'm thinking I might do just as well if mine was in my drawers

neversay wrote:

staffordian wrote:

neversay wrote:FWIW £25k in Premium Bonds held for six drawers and I've £25 won in each of the six drawers. All I need now is one of my regular monthly wins to be £1m...

Early days for me; £15k in play for the last two draws, nothing at all so far

OMG just noticed that in haste I had typed drawers instead of draws.

I always refer to that kind of thing as "Keyboard Dyslexia". It afflicts even those of us who would otherwise show no sign of conventional Dyslexia.

I seem to have a terrible problem with typing training and finance: they come out as traing and fiance

A thrilling, nay exhilarating, twenty-five poonds for me on a holding just shy of £13k
First win since May 2020

So what would happen to Premium Bonds should interest rates went negative?

It would seem like the first place to park large sums, so surely the resulting influx of funds would mean the Government has to freeze PBs?

neversay wrote:So what would happen to Premium Bonds should interest rates went negative?

It would seem like the first place to park large sums, so surely the resulting influx of funds would mean the Government has to freeze PBs?

Well the prize fund rate is currently 0.75% above the BoE base rate, don't you think that could be sustained?

Scott.

swill453 wrote:

neversay wrote:So what would happen to Premium Bonds should interest rates went negative?

It would seem like the first place to park large sums, so surely the resulting influx of funds would mean the Government has to freeze PBs?

Well the prize fund rate is currently 0.75% above the BoE base rate, don't you think that could be sustained?

Scott.

I would be parking a six-figure sum in there for a start. Wouldn't it draw too much capital away from the high street banks?

neversay wrote:I would be parking a six-figure sum in there for a start. Wouldn't it draw too much capital away from the high street banks?

I assume you know the maximum holding is £50,000?

Scott.

swill453 wrote:

neversay wrote:I would be parking a six-figure sum in there for a start. Wouldn't it draw too much capital away from the high street banks?

I assume you know the maximum holding is £50,000?

Scott.

I'd forgotten that, but that's helpful to know as I had topped up my holding to £45k last week.

I'm still intrigued though that in a (theoretical) negative interest rate environment, Premium Bonds even at 0.75% and losing against inflation would surely attract too much capital inflow away from banks to be sustainable?

neversay wrote:

swill453 wrote:

neversay wrote:I would be parking a six-figure sum in there for a start. Wouldn't it draw too much capital away from the high street banks?

I assume you know the maximum holding is £50,000?

Scott.

I'd forgotten that, but that's helpful to know as I had topped up my holding to £45k last week.

I'm still intrigued though that in a (theoretical) negative interest rate environment, Premium Bonds even at 0.75% and losing against inflation would surely attract too much capital inflow away from banks to be sustainable?

Retail deposits aren't the only source of bank funding. I suspect it will be only marginal. A bigger impact on banks with negative interest rates will be continued margin compression. Billions of pounds sitting in costly to provide current accounts "earning" a relatively even more attractive 0%.

dealtn wrote:

neversay wrote:

swill453 wrote:I assume you know the maximum holding is £50,000?

Scott.

I'd forgotten that, but that's helpful to know as I had topped up my holding to £45k last week.

I'm still intrigued though that in a (theoretical) negative interest rate environment, Premium Bonds even at 0.75% and losing against inflation would surely attract too much capital inflow away from banks to be sustainable?

Retail deposits aren't the only source of bank funding. I suspect it will be only marginal. A bigger impact on banks with negative interest rates will be continued margin compression. Billions of pounds sitting in costly to provide current accounts "earning" a relatively even more attractive 0%.

Thanks Scott and @dealtn. I was thinking of it less from the banks' position and more from the Government in that NS&I rates have already been dropped, and prize funds reduced, to discourage further inflows. NIRP would surely mean further dilution given that 0.75% and Government-backed security is comparatively attractive.

Have there been any other discussions on LF about the consequences of NIRP?

In my novice mind, the move to an economy with negative rates feels like the coin pusher machines in amusement arcades - money keeps going in at the top until the overhang gets too much. Only the winners are the ones that can scoop up the money when the lot crashes down.

Wouldn't one option open to the Gov' be to suspend any new investment in P/Bonds.....and either carry on with the monthly draw or not as they choose.

We have money in the Family Building Society prize draw bond. They suspended new investments some time ago but have continued with the monthly prize draw.

neversay wrote: ... Have there been any other discussions on LF about the consequences of NIRP?

Maybe not the ‘P’ but there are one or two related topics at “Macro”, such as:

viewtopic.php?f=76&t=21177

Just spotted that one was last January not this but anyway ...

You haven't told us what you won this month, PD.