ERNIE

The Chap had a letter from his bank the other day, they are transferring his ISA to another ISA and reducing his interest rate from 2% to 1.3%. He was not happy and we were discussing where best to save your money.

In these days of large debts and poor interest rates on savings, trying to get a decent savings rate is pretty impossible.

I do not know what TC will do, but I have started to put some money into Premium Bonds. I am not advocating this as a savings plan to anyone, but in the last 12 months I have had a 7% return on my money, much more than I would expect on the high street at a bank or building society.

If you are not from the UK, you can read more on Premium Bonds and Ernie here. Interestingly, according to the Premium Bond Probability Calculator on MSE If you hold over £100 per year the chance of winning anything is 4.5%.

Just be aware that some years, I have not won a penny for over 12 months then had a bigger win of say £100.

I like Premium Bonds, I like receiving the Long White Envelope with a cheque enclosed and enjoy the thought you never know I could win a £1Million!

I can get my money back at c. 10 days notice.

But beware, the rules for buying Premium Bonds have changed a lot recently and its pretty annoying if you go in the Post Office unprepared.

Some Thoughts

1)      If you already have some bonds, make sure you have your Holders Number to hand when you buy more so they are amalgamated together with that £25 your Aunt Bertha gave you on your Christening.

2)      Do not go in to buy them with cash, the post office will not accept it, due to cash laundering regulations. Seems ridiculous to me as most of the time one is only buying them a £100 at a time.

3)      You will need your bank details, as they have very recently changed the payout from a cheque to bank transfer.

4)      If buying them for someone else, e.g. I often pick up some for The Chap, you will need them to sign the form.

And finally, you can only buy Premium Bonds in multiples of £100.

It is a faff to buy them now to be honest, TC has registered to buy them online and says that is irritating too.

I like having them though, as it is a bit trickier to get at your money quickly so no impulse buys of shoes etc, but I can still grab my money back if needed within 2 weeks.

One last thing, if you do have an old £1+ premium bond knocking around, write to National Savings and Investments Agency, immediately as chances are it is registered to the wrong address and they cannot find you if you had won. When I did this years ago I got a nice cheque for £100 as they numbers had come up more than once in the 20 years since it was bought.

Frugally yours
Abigail
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