€25k invested in prize bonds

Winnings on 12th July 2024 on €112k: €75

Last win on 3rd May 2024: €75 X 2

actually….

anyone using an iphone/safari to log into the website?

when I'm prompted to use saved passwords it just crashes back out. I have to manually enter the information

Same with the code that they text me… very annoying

The password works OK on my iPhone but the PIN (verification Code) has never worked if you allow safari to enter it, as you say it just "crashes" back to the initial log-in screen. You have to enter the PIN manually.

The same thing used to happen on the website (Safari on Mac) but they appear to have fixed this recently.

Yeah give AIB a call and give them details of the message you received when you attempted the purchase.

Prompted by a couple of recent comments about inconsistent win rates I looked at my PB to see if there were any patterns. Part of my holding consists of 9no. x €25k batches purchased in the first couple of weeks of May 2023, on consecutive days, so they are now 14 months old. The reason for purchasing in this manner was rather than messing with bank drafts I used my BOI debit card which allows up to €25k per day. So an interesting sample to compare the performance variation in batches of the same size over the same time period. (Some batches were included in one or two draws more than others, but I'm ignoring this for this exercise)

Results over 14 months are :

• 1no. batch = zero return. – Total €0
• 2no. batches = 1 x €75 – Total €75 each, €150
• 1no. batch = 1 x €50 and 1 x €75 – Total €125
• 1no. batch = 2 x €50 and 1 x €75 – Total €175
• 1no. batch = 1 x €50 and 2 x €75 – Total €200
• 1no. batch = 1 x €50 and 3 x €75 – Total €275
• 1no. batch = 4 x €75 – Total €300
• 1no. batch = 1 x €50 and 6 x €75 – Total €500

The difference between the worst performing batch, which won nothing, and the best performing batch which had 7 wins and a total of €500 is huge. I think this gives a very good indication of just how “lucky” or “unlucky” you can be, irrespective of the size of your holding.

Total return is €1,725 which is .77% over 14 months, of which 5 months was at the old notional rate (.35%) and old prize structure and 9 months at the current notional rate (1%) and current prize structure. This approximates to an annual return of .66% over the period.

100k Invested on 6th June 2024.

7th June - No win

14th June - €75

21st June - 0

28th June - 0

05th July - 0

12th July - 0

19th July - 0

(disappointing win rate so far)

It is correct to say that the notional interest rate is currently 1%. However this includes the small number of "larger prizes (€500 - €500,000) which, given the huge number of bonds in issue, you have very little chance of winning and so they skew the odds significantly. Looking at the €75 prizes only, which is the vast majority of prizes, the current expected return in approx .77%.

Based on the current notional interest rate, the current prize structure and average luck, a €100,000 holding can expect to win 10.22 €75 prizes per annum. So one win in seven weeks is close to the expectation. There is also the (remote) chance of winning a larger prize.

Someone getting 4% has to pay one third of that in DIRT, making the real return 2.68%. Prize Bond winnings are DIRT free.

€75 for me today.

Heavily invested in equities already and don't want to put more money into the markets, bonds or equities.

Bought the PB's as a bit of fun for Friday each week with the remote possibility of a big win.

A 2.68% net return is way better than the average PB net returns (around 0.77% excluding big prices). Like 4 times better.

As is often mentioned in the media, €150 billion is held in accounts paying less than 0.77%. And another €20 billion in Credit Unions which won't even tell depositors what rate they are paying until the end of the year.

Prize Bonds people are famous for having very diversified portfolios, moving some of their funds around to get the best deals. The €4.5 billion in Bonds is just for the simplicity of the product, and the State guarantee. No need to worry about them not getting much of a return.

https://www.bonkers.ie/blog/personal-finance/raisin-offering-up-to-100-bonus-interest-to-savers/

https://www.rte.ie/news/business/2024/0324/1439481-clock-is-ticking-on-enhanced-deposit-offerings/

A few comments on the issue of PB returns. It's important to understand why you hold Prize Bonds and manage your expectations accordingly.

4% for demand deposits with a dependable capital guarantee is rare in the Irish market. N26 (for Metal Account holders) is currently the only one I am aware of, though how long that will last is another question. 3% is a far more realistic measure for camparative purposes.

While DIRT is 33% currently, the actual rate can be higher. It reaches a combined 37% (33% DIRT and 4% PRSI) for those who are considered Chargeable Persons by Revenue, 40% for income on Deposits outside the EU for higher rate income tax payers and a combined 44% (40% DIRT and 4% PRSI) for Chargeable Persons on income on Deposits outside the EU. There is no DIRT or other domestic tax payable on Prize Bond prizes.

There are significant reasons for buying Prize Bonds apart from the rate of return. Principal among these are the strength of the guarantee (Repayment of all funds held by State Savings is a direct, unconditional obligation of the Irish Government as opposed to the DGS which is not Government guaranteed), elevated guarantee ceiling (all funds held by State Savings are guaranteed, as opposed to the DGS limit of €100k, and lower limits in other cases), funds are available on demand (after 90 days) and the chances, however remote, of winning a “large” prize. Prize Bonds should always be seen as complimentary to other asset classes such as equities, other bonds, bank deposits, gold, tulips, bitcoin etc and not as an exclusive alternative – i.e. to held as part of an appropriately balanced portfolio.

That said, I believe that the current rate is unfairly low and represents a failure by Michael McGrath to meet the expectations he created when he was opposition spokesman. After he got the job as Minister for Finance he failed to remedy the deficiencies he highlighted most vocally in the past.