Thanks Weenie. The “bonds” part of the “premium bonds” name might be the reason people treat them as investments. And in my view, they are.

But as you rightly said, you don’t have to treat the comparison as black and white. It’s human nature, however, to ask questions that demand an all-in or all-out answer. Like “Should I be in stocks or not?”.

I agree with you. There is a place for both property and premium bonds.

However, I’m not sure it makes sense to compare premium bonds to property or other investments because premium bonds are not ‘investments’. They’re equivalent to cash, eg like cash you hide under your mattress, except there’s no chance to win a big monthly prize.

Premium bonds are risk-free, absolutely liquid and are tax free. If you had the cash in a Marcus account, there’s an interest amount threshold (£1k for BRT or £600 for HRT) before you start paying tax, though I guess you have the certainty or receiving said interest, whereas there is no guarantee you will win a prize with the premium bonds.

FYI, I hold investments, property and premium bonds, they’re not mutually exclusive! The premium bonds represent the cash element of my portfolio (around 10%).

While my investments all went down these past few months, my premium bonds stayed the same (albeit eroded by inflation).

Also since you’ve invested in premium bonds, how do you find them? I couldn’t find a strong case for owning them. I can’t put a price on the thrill of winning big though :)

Thanks, Laura, you are right! I mistakenly thought the 1.4% annual interest is paid out but that’s the bucket from which prizes are drawn. This makes the case even worse for premium bonds vs property or other investments. I’ve corrected my answer, thanks again!