Premium Bonds

[classylady60]

How does one work out the percentage of interest rec'd when one receives a prize. e.g. Say you have �30k in bonds and over a year you win around �1k in prizes, what percentage is that on 30k - just so that you can check against whether putting the money in a building society that year would have been a better option? I would like to know how the calcs work out please on any sum.

Thanks to anyone who can tell me.

[Oneeyedvic]

Hopefully this will help: http://www.nsandi.com/interest-rates/index.jsp

Premium bonds have an average interest rate of 3.60% - but don't forget that this is tax free - you will be paying tax on Interest from a building society.

To calculate it yourself: Take your winnings (�1000) from your investment (�30,000) which is �29,000. Divide this by your investment (�30,000) and the figure you will have is 0.9667

Subtract this figure from 1 and multiply by 100 - this is the percentage - in this case 3%.

Hope this helps

[dasherman]

I think you'll find the percentage is actually 3.33!

The extra 0.33% is worth another �100.

[THECORBYLOON]

The �1,000 is 1/30th or 3.33% of the original �30,000

31,000
--------- x 100% = 103.33%
30,000

so you have 3.33% more than you started wi.

If you are comparing this wi Building Societies, you have to look at their Net Rates which is what they pay after deducting tax.