In the FT, Peter Orszag argues that savings lotteries can boost the US savings rate. His article cites various examples (especially the UK) but he may want to consult the Irish prize bonds site also (here).
I got this response to a query on the prize bonds last november – the data is probably also available on the site but I don’t see it obviouly:
“We wish to advise all monies generated from Prize Bonds are passed to the NTMA on a daily basis, which are lodged to the exchequer. All investments are guaranteed and fully refundable on written request from the Bondholder.
The current Prize Fund is calculated at 3% interest rate as a per centage of the total investment fund which is currently in excess of EUR1.295 billion. There are approximately 206.5 million Prize Bond units/numbers participating in the weekly prize draws.”
Prize bonds are a great idea in my mind, but I have some doubts.
1) Does anyone know anyone who ever won on a prize bond? I have never heard of it.
2) As you get no interest on the money isn’t it a poor loing term strategy for savings(unless you win, but see point 1), inflation /deflation etc?
@conor
In the eighties I had a sum of money to invest after working overseas. I decided to “invest” £1000 of it in Prize Bonds. At that time, Savings Certificates were yielding 11%, and marginal tax rates were high for a single person, so tax-free prizes were attractive. After writing to the Prize Bond office to find the total number of Prize Bonds, and the number of prizes each week (current figures are in AMcGrath’s comment), I calculated using a Probability textbook, that I would have to wait eight years to have an 80% chance of winning at least one prize. Towards the end of the eight year period, I did imdeed win a prze, the minimum prize of £100 . An interest rate of just over 1% p.a., but tax free and a bit of fun.
you should have put it all on red!
@Conor
“Does anyone know anyone who ever won on a prize bond? I have never heard of it.”
One of the more disappointing things in life is to be the winner in a prize bond draw – first you wait maybe five years after investing your €1000 and then a letter arrives postmarked killorglin bearing the princely sum of – I think I got €75 a few times. It’s a bit of a bummer since you kinda feel that since you were “lucky” enough to win it should be something worthwhile.
To rephrase your question -Does anyone know anyone who ever won anything substantial on a prize bond?
No! I was left with the impression that the draw is, or could be, poorly regulated and that the paltry prizes are just enough to prevent withdrawals.
Be A Butterfly For Ireland
I was considering the question, what we the Irish people, at home and abroad, can do for Ireland? I have come up with the idea of raising 1 Billion Euros for Ireland, this is not as crazy as it may sound. If one million people invested €1000 in Irish Prize Bonds we could raise 1 Billion Euros!
You may be thinking, why should we support politicians and bankers who mismanaged the Irish economy? It is not about bailing out cute ho…or politicians, or incompetent bankers. It is about raising revenue for the country, for the benefit of the people.
It is not charity, donating money to assist the old county. No, this is an investment in Ireland. It will only cost you less that €20 a week for one year, the cost of a coffee a day for one year. I am not suggesting it is the best investment in the world, but if you do win the monthly €1 jackpot it will be. However, the point is not about winning a prize, it is about doing our bit to assist Ireland.
The butterfly effect – a small change at one place in a complex system can have large effects elsewhere. So, If we all do a little, we can make a difference.
If you know any potential butterflies, please pass on the message!
When deposit interest rates were pathetically low I put a chunk of money into prize bonds and was delighted with my regular cheques for €75. It’s all about scale. If you just have a few hundred you’ll rarely win, but if you put in a few grand – they come up. Even now when deposit rates have gone up I spread out savings and always leave a few k in prize bonds. The best deposit rates require money to be locked up, for at least a year, for any decent rate but with prize bonds you can cash them in quickly. The money “feels safe”, I still get the odd cheque, AND I might win big! It’s a nice safe bet.
Someone told me the big money is won by pension funds who buy millions of prize bonds. I guess we’ll never know….
[…] discussion about turning to bonds held by individual private citizens, rather than institutions has included mention of Irish Prize bonds. An interesting question […]
i bought €300 worth 2 weeks later 2x€75 nice one
Now ive bought 15k worth and nothing ,ithink thats what they call tactics and i fell right into the trap hahaha silly me,but i still have a chance ant im not gonna give up.
Prize bonds are the same as you handing your savings over to the state and in return they give you a small chance of winning a pathetic €50 prize.
Its a joke, the prizes used to be €75 which was bad, €50 is an insult, its about time we the citizens cash in all our prize bonds, maybe then the Government will learn to stop taking the people for granted.
Either way i’ll be cashing in my bons over the next week.
11 replies on “Funding the State: Prize Bonds”
I got this response to a query on the prize bonds last november – the data is probably also available on the site but I don’t see it obviouly:
“We wish to advise all monies generated from Prize Bonds are passed to the NTMA on a daily basis, which are lodged to the exchequer. All investments are guaranteed and fully refundable on written request from the Bondholder.
The current Prize Fund is calculated at 3% interest rate as a per centage of the total investment fund which is currently in excess of EUR1.295 billion. There are approximately 206.5 million Prize Bond units/numbers participating in the weekly prize draws.”
Prize bonds are a great idea in my mind, but I have some doubts.
1) Does anyone know anyone who ever won on a prize bond? I have never heard of it.
2) As you get no interest on the money isn’t it a poor loing term strategy for savings(unless you win, but see point 1), inflation /deflation etc?
@conor
In the eighties I had a sum of money to invest after working overseas. I decided to “invest” £1000 of it in Prize Bonds. At that time, Savings Certificates were yielding 11%, and marginal tax rates were high for a single person, so tax-free prizes were attractive. After writing to the Prize Bond office to find the total number of Prize Bonds, and the number of prizes each week (current figures are in AMcGrath’s comment), I calculated using a Probability textbook, that I would have to wait eight years to have an 80% chance of winning at least one prize. Towards the end of the eight year period, I did imdeed win a prze, the minimum prize of £100 . An interest rate of just over 1% p.a., but tax free and a bit of fun.
you should have put it all on red!
@Conor
“Does anyone know anyone who ever won on a prize bond? I have never heard of it.”
One of the more disappointing things in life is to be the winner in a prize bond draw – first you wait maybe five years after investing your €1000 and then a letter arrives postmarked killorglin bearing the princely sum of – I think I got €75 a few times. It’s a bit of a bummer since you kinda feel that since you were “lucky” enough to win it should be something worthwhile.
To rephrase your question -Does anyone know anyone who ever won anything substantial on a prize bond?
No! I was left with the impression that the draw is, or could be, poorly regulated and that the paltry prizes are just enough to prevent withdrawals.
Be A Butterfly For Ireland
I was considering the question, what we the Irish people, at home and abroad, can do for Ireland? I have come up with the idea of raising 1 Billion Euros for Ireland, this is not as crazy as it may sound. If one million people invested €1000 in Irish Prize Bonds we could raise 1 Billion Euros!
You may be thinking, why should we support politicians and bankers who mismanaged the Irish economy? It is not about bailing out cute ho…or politicians, or incompetent bankers. It is about raising revenue for the country, for the benefit of the people.
It is not charity, donating money to assist the old county. No, this is an investment in Ireland. It will only cost you less that €20 a week for one year, the cost of a coffee a day for one year. I am not suggesting it is the best investment in the world, but if you do win the monthly €1 jackpot it will be. However, the point is not about winning a prize, it is about doing our bit to assist Ireland.
The butterfly effect – a small change at one place in a complex system can have large effects elsewhere. So, If we all do a little, we can make a difference.
If you know any potential butterflies, please pass on the message!
http://www.facebook.com/BeAButterflyForIreland
I win Prize Bonds!
When deposit interest rates were pathetically low I put a chunk of money into prize bonds and was delighted with my regular cheques for €75. It’s all about scale. If you just have a few hundred you’ll rarely win, but if you put in a few grand – they come up. Even now when deposit rates have gone up I spread out savings and always leave a few k in prize bonds. The best deposit rates require money to be locked up, for at least a year, for any decent rate but with prize bonds you can cash them in quickly. The money “feels safe”, I still get the odd cheque, AND I might win big! It’s a nice safe bet.
Someone told me the big money is won by pension funds who buy millions of prize bonds. I guess we’ll never know….
[…] discussion about turning to bonds held by individual private citizens, rather than institutions has included mention of Irish Prize bonds. An interesting question […]
i bought €300 worth 2 weeks later 2x€75 nice one
Now ive bought 15k worth and nothing ,ithink thats what they call tactics and i fell right into the trap hahaha silly me,but i still have a chance ant im not gonna give up.
Prize bonds are the same as you handing your savings over to the state and in return they give you a small chance of winning a pathetic €50 prize.
Its a joke, the prizes used to be €75 which was bad, €50 is an insult, its about time we the citizens cash in all our prize bonds, maybe then the Government will learn to stop taking the people for granted.
Either way i’ll be cashing in my bons over the next week.