Prize Bond vs 5 Year Fixed State bond

masterboy123

Hi All,

I want to invest around €10k and wondering which would fetch me a better return?

Prize Fund rate currently 0.35%.

5 year bond = 3% Total Return.

Any advice/opinion please.

Jim_Hodge

Do you want a guaranteed return? If so, it's a no brainer.

masterboy123

https://www.boards.ie/discussion/comment/119817180#Comment_119817180

Not a guaranteed return. But I do want guaranteed safety of my investment.

I am flexible with returns as long as there is a return.

I am unsure if Prize Bonds are worth it in the sense that every year you win at least some money?

Jim_Hodge

All I'll say is, as it's ultimately your call, I haven't had a win in €5000+ of prize bonds since €50 about 20 years ago. I've earned interest on Certs and Bonds though. However other people seem to pick up regular wins.

masterboy123

https://www.boards.ie/discussion/comment/119817208#Comment_119817208

Thanks for sharing this info. This will definitely help me with the decision making.

dxhound2005

This is probably the wrong time to tie your money into a 5 year fixed interest product launched in January 2021. Especially as the real return is not achieved until year 5. Your €10K will be worth the following. After one year €10,000, two years €10,020, three years €10,030, four years €10,050, five years €10,300. That is 5 year Savings Certificates, but all the fixed interest products are much the same model.

https://www.statesavings.ie/our-products

I would take my chances with Prize Bonds. The real world return is 0.25% with average luck, because of the amount of the 0.35% allocated to big prizes. €10,000 would win a €50 prize every two years with average luck.

phormium

I'm someone who never wins stuff normally but I have reasonably regular wins with prize bonds, now in fairness I have a good few bought over the years and at the moment if I continue on the trend over the past few years then I have a better return than any savings rate over those years but it is just chance! All small mind you, 50 three or four times a year in recent years. If you want the guaranteed return go for the other.

masterboy123

Thank you both. I am inclined towards Prize Bonds, especially with their big prizes. But I need to do further research and see what I really expect in return.

dxhound2005

https://www.boards.ie/discussion/comment/119817208#Comment_119817208

The €50 prizes did not come into the system until January 2013. Before that the lowest prize was €75.

Jim_Hodge

https://www.boards.ie/discussion/comment/119818142#Comment_119818142

Then it must have been €75. It's so long ago I can't remember. All I know is it was small and I've won nothing since. Maybe next month though...

notsocutehoor

It's pretty simple really, if you want €10,300 guaranteed after 5 years then its the 5 year fixed, if you want €10,000 guaranteed after 5 years with the chance of a big win and the thrill and exhiliration (followed by deflation most weeks) of checking your numbers at 12:01 every Friday then it's Prize Bonds.

Thems the choices, it'll have to be your decision

masterboy123

https://www.boards.ie/discussion/comment/119818179#Comment_119818179

Thanks.

But you do get guaranteed 0.35% return on Prize Bond, isn't it? So that would give me a guaranteed €10035 after 5 years.

Jim_Hodge

https://www.boards.ie/discussion/comment/119818368#Comment_119818368

No. There is no guaranteed return with Prize Bonds. The Prize Fund is guaranteed, not individual returns.

https://www.boards.ie/discussion/comment/119818179#Comment_119818179

If you register for the Prize Bond tracker then you have to wait until 12.30 before logging in and (usually) seeing the exciting words "Sorry pal but you have no winner this week! Maybe you'll be lucky next next week - but probably not! Best wishes, Gabriel Makhlouf"

*these words may not be 100% accurate, but they give you the gist!

notsocutehoor

https://www.boards.ie/discussion/comment/119818476#Comment_119818476

Didn't realise that you had to wait till 12:30 for the good (or most likely bad) news, obviously I'm not waiting with bated breath for the news every Friday

notsocutehoor

https://www.boards.ie/discussion/comment/119818368#Comment_119818368

The only thing you're guaranteed with Prize Bonds is your original investment, you put in €10k you are guaranteed to get €10k out

HeidiHeidi

I've had a couple of thousand of Prize Bonds for absolutely donkeys years - I used to get fairly regular prizes (maybe 2-4 per year) for a while, but it's been so long since I've won anything, I'd actually forgotten they existed until I saw this thread!

If you're looking for a return on money, I wouldn't be banking on Prize Bonds for it (pardon the pun).

https://www.boards.ie/discussion/comment/119818673#Comment_119818673

I developed a routine of checking every Friday, back in the days when the prize fund was a meaningful percentage, and sadly I haven't kicked that habit yet!

Back then, the €1 million prize used to be won every month. Then it was halved to six times a year, then reduced again to four times a year. A year later it was reduced to twice a year where it remained until it was abolished!

Similarly, the prize fund percentage has fallen over the past decade from 2.25% to a mere 0.3%. So in crude terms, the number of prizes to be won these days are only 1/7th of what they were a decade ago. A mugs' game!

dxhound2005

There are no €1 million prizes since February 2021. There is a €250K prize four times a year.

mct1

I just checked our two 5 year State Savings Certs taken out in 2018 and 2020 - both giving 5% total return. It didn't seem much of a deal at either time of purchase but we'd maxed out on our bank guarantees elsewhere. All in all I'm glad we did as it's very secure. I'm looking for somewhere to put our KBC deposits now and thinking of another SS 5 year cert. I certainly won't be consider Prize Bonds. I bet on the Grand National just once in the 70s and bought a single Lotto ticket 15 years ago - clearly not a gambler at heart. I'd choose the Savings Cert but then I would.

notsocutehoor

https://www.boards.ie/discussion/comment/119819315#Comment_119819315

You're confused if you're equating Prize Bonds with the Grand National or a single Lotto ticket