Client questions
There are many financial issues facing us all in the UK today; an ageing population, pressure to consume, insufficient saving, incomprehensible financial products and services, whilst to top it all there are very few places to turn for truly impartial advice.
This section of our website aims to answer some of the questions we are commonly asked by clients. We hope you find what you need, but if not why not have a look elsewhere on our site or e-mail us your question using our enquiry form.
Q - Which are best - Premium Bonds or Cash ISAs?
At least with a Cash ISA you know what return you are going to get, and that’s the key advantage.
The rates may seem low compared to current CPI and RPI inflation rates and compared also to where Cash ISA returns were a few years ago but then again, the Base Rate is just 0.5%. You can still get over 3% in an instant access Cash ISA so, at 6 times the Base Rate, that’s not low at all. In fact, it seems remarkably high!
With Premium Bonds you don’t know what return you will get. The annual prize fund pays out around 1.5% p.a. That’s half what you can get in a Cash ISA. However, there is always that very slim chance that you will win the £1 million jackpot but, equally, if you are very unlucky you might get no return at all!
The rates may seem low compared to current CPI and RPI inflation rates and compared also to where Cash ISA returns were a few years ago but then again, the Base Rate is just 0.5%. You can still get over 3% in an instant access Cash ISA so, at 6 times the Base Rate, that’s not low at all. In fact, it seems remarkably high!
With Premium Bonds you don’t know what return you will get. The annual prize fund pays out around 1.5% p.a. That’s half what you can get in a Cash ISA. However, there is always that very slim chance that you will win the £1 million jackpot but, equally, if you are very unlucky you might get no return at all!
Evolve - June 2011
