NS&I cut the premium bonds rate - Are they still worth it?

NS&I Recently slashed the rate on premium bonds from 1.4% to 1%. I put this quick video together showing how this changes my attitude towards them. Spoiler.. It doesn't.

A couple of people asked me about the recent rate cut at NS&I, I use premium bonds so I thought it only fair to put my thoughts on the drop into a video. If you use Premium bonds as an investment you will probably not be happy with the rate decrease. But me... Im meh about it.

Hope you enjoy this short little video.

Damo

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Disclaimer: Any information provided in this video is meant purely for entertainment purposes and does not constitute any form of recommendation, They are simply my opinions. If you want financial advice tailored to your circumstances please consult with a licensed professional.

[DamienTalksMoney]

I am trying this out as a test
Shorter videos on Current events in the UK finance scene.
It doesn't need to get a ton of views or anything, But if you guys think this kind of video is useful? I will keep making them.
I will still keep making my normal educational content! so don't worry,
Carol is going nowhere.

Damo

[ruairidonnelly]

These videos really are great. They should be part of the school curriculum as I think your style would resonate with young people.

[dipti]

Yes! Great info Right here right now... most of the time, content is atleast 4 weeks old and so strategy changes but these short sharp videos are on point to make decisions in time when markets are highly volatile changing every hour! Thanks

[thecongrevefamily]

les'gedit! edits getting better mate! cheers for the info, keep em coming! Although im not too keen on premium bonds myself. I took mine out and I'm putting the cash elsewhere. I purchased "the little book of common sense investing". Im gonna dive into the vanguard index funds and long term investing that way. Great book btw!

[Simscraggy]

So I also use my PB as an Emergancy fund, it’s maxed out, and in two years I have collected £2450 in price money up to September this year, way more than interest on any other account, Sep was a decent return with 4x25 and 1x500. For me it’s the perfect place to store a full years salary. Hope this helps somebody to consider the advantages, also this was established prior to putting Amy significant money into investments.

[stevethomas]

...and now it's currently sitting at around a whopping 0.15%. I've NEVER looked at Premium Bonds as any kind of investment, just a holding bay for some emergency funds like you said.

[samuelmarsh]

All your videos are so useful mate I feel so blessed to have your great advice at the click of my phone.
Im going to put some money in these Premium Bonds for sure. Than you buddy ☺️

[davidw.]

Well said, and I use premium bonds for the same purpose.

I have a tiered system:
Small amount of fast access cash in a current account which is not used for any other purpose.
Much larger amount in premium bonds.
The next tier is high yield bonds, > 4% return.
Final tier is multiple fund investments, which could generate a passive income if needed, but I use accumulation funds for now for the better returns. These average an annualised return of over 10%.

The returns on savings accounts are barely worth considering in my view.

[adventureforwellbeing]

Hi Damien
Interesting to hear your thoughts on Premium bonds and the idea of sticking your emergency fund in them. I'm only getting 0.5% on my instant access emergency fund. Which is better than nothing. But, as you said, with Premium bonds there's the potential to win.
Great video and thanks for the name check 😂😂

[Muricastuff]

Excellent video and points! Really been enjoying your content!

[anthonycotterfinance]

Interesting to know that you use them as a Emergency Fund. Like the short vid mate.

[Ricky-kdkm]

It’s so weird how you always seem to post at the same time I’m thinking about the same subject. 😀

[zaiedsaleem]

Short and sweet.. To the point... Works for me. 👍

[mukutin]

Hi Damien, thanks for another great video. i have a question:
Given that the inflation is gonna eat into your savings at 2% every year, is there a better way to build your emergency fund or are NSI premium bonds and the high interest savings accounts the only options?
if the latter is true then aren't we losing money every year by choosing to have an emergency fund in those two areas? is this inevitable? is this the cost we pay to have an emergency fund. can't i have my cake and eat it too :P

[elliethousand]

I had 100k in NS and I income bonds. The interest went down from about 70 a month to 68p after the rate change. In 9 months of having £40k in premium bonds I've 'won' nearly £600. I have to assume this is just luck.

[scazz]

Thanks buddy, quick and sweet video 👌

[veritydean]

Love your videos- makes money so easy to understand. Thank you 🥰

[sineadmcaleer]

As this is where you keep your emergency fund does that mean it's super easy to withdraw? How quickly can you pull your money out?

[VelocciYT]

2k in a month i bet!
Keep it up mate you are gonna be famous soon :D

[EuanCopeland]

I haven’t actually got these for my emergency fund - but I probably should! How many times have you won? 😳