Q. As a Surgeon with private earnings, my accountant has mentioned that instead of saving for my tax bill in a deposit account, I could ‘have a gamble’ by placing these monies into Premium Bonds.
What I want to know is, what can I expect as a return on my investment? I know deposit rates are not very good at the moment, but is this route worthwhile?
A. We are glad that your accountant phrased this way of saving for the tax man as ‘a gamble’, as that is what it is.
Perhaps the most you can expect from an easy access account is 1-2% net (or offset mortgage perhaps 2-3%), but at least you know what you are getting.
There’s nothing wrong with ‘having a go’ with Premium Bonds of course, and there’s a calculator you can use #. Briefly, if you invest £30,000, your chance in any one year of winning at least:
£1m is 1 in 110,088
£100k is 1 in 22,402
£10k is 1 in 1,584
£1.5k is 1 in 285
If you invested your £30k into a 1.67% net paying deposit account, then you would receive around £500 per annum. The chances of getting this with the Premium Bonds in any one year would be around 1 in 4.
Over to you!
About Graeme Urwin
