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Thread: Bonus Bonds

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    Default Bonus Bonds

    Does anyone still have these? I had a couple of grand a few years ago but never won a thing so took them out. Given the crappy bank deposit rates we have now, I’m wondering if I should take a chance and get a few. Don’t want to go down the term deposit route right now as there’s always a chance an emergency could mean I need quick access. Bonus Bonds can be paid out in a day according to their website.

    Thoughts?
    Last edited by justakiwi; 20-11-2019 at 07:54 PM.

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    I manage my parents financial affairs, they have 45k in bonus bonds and do get a constant stream of wins, i have been tracking it for 5 years as they insist i do not park that money someone else..the annual returns range have been in the range 3.3-4.6 % p.a for the five years. Always expect they will have a year with a very low return..although yet to happen.

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    Quote Originally Posted by Raz View Post
    I manage my parents financial affairs, they have 45k in bonus bonds and do get a constant stream of wins, i have been tracking it for 5 years as they insist i do not park that money someone else..the annual returns range have been in the range 3.3-4.6 % p.a for the five years. Always expect they will have a year with a very low return..although yet to happen.
    They must have the golden touch. Current payout of bonus bonds is 1.4%
    I purchase some every month and cash in to pay my GST - six monthly. It's just a silly way to budget for the tax. My return after several years is probably less then 1%. Don't think I'll bother working it out.

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    Wow. That’s a heck of a lot of chances to win each month. I didn’t think anyone would have that kind of money tied up in them.

    Quote Originally Posted by Raz View Post
    I manage my parents financial affairs, they have 45k in bonus bonds and do get a constant stream of wins, i have been tracking it for 5 years as they insist i do not park that money someone else..the annual returns range have been in the range 3.3-4.6 % p.a for the five years. Always expect they will have a year with a very low return..although yet to happen.

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    I have heard of people selling a house and using bonus bonds as a short term parking place for the money. I put 3 grand in many years ago and won 1 grand within a few months. But I have been out of them for a long time.

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    Quote Originally Posted by airedale View Post
    I have heard of people selling a house and using bonus bonds as a short term parking place for the money. I put 3 grand in many years ago and won 1 grand within a few months. But I have been out of them for a long time.
    I did that. After 3 months I'd only collected $60. Pulled it all out and gambled it instead...

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    Quote Originally Posted by Raz View Post
    I manage my parents financial affairs, they have 45k in bonus bonds and do get a constant stream of wins, i have been tracking it for 5 years as they insist i do not park that money someone else..the annual returns range have been in the range 3.3-4.6 % p.a for the five years. Always expect they will have a year with a very low return..although yet to happen.
    Many years ago I had a similar number and was getting the same return range you mention so better than a term deposit by some margin plus they are tax free.

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    Quote Originally Posted by couta1 View Post
    Many years ago I had a similar number and was getting the same return range you mention so better than a term deposit by some margin plus they are tax free.
    Many years ago things were different. Their investments had higher returns, so their prize fund was much higher than the current 1.4%
    e.g. I currently have just over 90k in BB. Sept. prizes were $140. Oct was $60 and November's draw was zilch.
    Last edited by fungus pudding; 21-11-2019 at 01:16 AM.

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    I have a small amount - have been in for years, I worked out a few years ago my return averaged about 2%.
    I have heard of some with large amount in them and they get a prize regularly - so the return probably better than most term Deposit rates currently and funds are on call - plus you never know you may hit the jackpot

    Must be a large amount in the fund being able to pay out $1M+ every month - cheap money for ANZ I suppose

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    According to the product disclosure statement, 2019 payout is 1.2%. I understand tax is not payable. So, if you can make more than that after tax elsewhere you will most likely be better off doing so. You are welcome to accept a lower expected return in exchange for the thrill of gambling - it beats the lottery for sure.

    Note that monthly prize fund is about 3 million, so the 1 million prize takes up a big chunk and reduces the expected return for everyone else accordingly.

    Holding more bonus bonds does not change the expected return (in percentage terms), although it will reduce the variance.

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    So how do those of you with large investments in BB manage them? Are you going to park your money there indefinitely, even if you win nothing in any given year? What’s the game plan?

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    Quote Originally Posted by mfd View Post
    According to the product disclosure statement, 2019 payout is 1.2%. I understand tax is not payable. So, if you can make more than that after tax elsewhere you will most likely be better off doing so. You are welcome to accept a lower expected return in exchange for the thrill of gambling - it beats the lottery for sure.

    Note that monthly prize fund is about 3 million, so the 1 million prize takes up a big chunk and reduces the expected return for everyone else accordingly.

    Holding more bonus bonds does not change the expected return (in percentage terms), although it will reduce the variance.
    You have 1 chance in 3 billion approximately of winning a million. Chances of winning $20 still ridiculously low.

    https://www.scoop.co.nz/stories/PO18...n-benefits.htm

    “Each Bonus Bond has a one-in-three-billion chance of winning the monthly $1,000,000 prize; winning a $20 prize had a 1 in 28,632 chance”
    Last edited by fungus pudding; 21-11-2019 at 11:24 AM.

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    Well that’s not ideal

    ‘Maybe I’d be better taking a chance with one of those “monthly prize” bank accounts instead.

    Quote Originally Posted by fungus pudding View Post
    You have 1 chance in 3 billion approximately of winning a million. Chances of winning $20 still ridiculously low.

    https://www.scoop.co.nz/stories/PO18...n-benefits.htm

    “Each Bonus Bond has a one-in-three-billion chance of winning the monthly $1,000,000 prize; winning a $20 prize had a 1 in 28,632 chance”

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    Quote Originally Posted by justakiwi View Post
    Well that’s not ideal

    ‘Maybe I’d be better taking a chance with one of those “monthly prize” bank accounts instead.
    Or put it in a regular savings account, and blow all the interest on Lotto. Still hopeless, but it satisfies the gambling instinct.

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    It’s not about the gambling. I just hate seeing my small amount of savings earning a pittance in deposit interest. I can’t tie it up as it may be needed for emergencies (such as the hail damage my car suffered in yesterday’s golf ball sized hailstorm! $400 excess for insurance claim, which will have to come out of my savings).

    I just want to find to find something a bit more proactive to do with it

    Quote Originally Posted by fungus pudding View Post
    Or put it in a regular savings account, and blow all the interest on Lotto. Still hopeless, but it satisfies the gambling instinct.

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    I think that there was a newspaper article a few weeks or months age,I didn't read it but I remember the headline : something like "ANZ executive blows whistle on bonus bonds".

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    It's long been recognised that Bonus Bonds pay out a below-market rate of interest. The attraction for most holders has been in the lottery element - the chance of striking the "big one" with the option of redeeming one's stake at any time.

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    Resurrecting this thread, as I am finding myself once again contemplating this as an option. Heartland just dropped their Direct Call interest rates which now means my three accounts with them are earning sweet fanny Adams. These are savings accounts set up for specific goals eg: eventual car replacement, and general long term savings. I have emergency funds elsewhere.

    Do those of you who contributed to this thread before, still “Park” funds in BB or have you given up on that idea?

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    Quote Originally Posted by justakiwi View Post
    Resurrecting this thread, as I am finding myself once again contemplating this as an option. Heartland just dropped their Direct Call interest rates which now means my three accounts with them are earning sweet fanny Adams. These are savings accounts set up for specific goals eg: eventual car replacement, and general long term savings. I have emergency funds elsewhere.

    Do those of you who contributed to this thread before, still “Park” funds in BB or have you given up on that idea?
    I've had $75 worth since 1985 and never managed a prize from them.
    I also put 300k in for 6 months a few years back and got $125 in prizes from those bonds...

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    With interest rates where they are the prize pool
    is most likely even less these days . It’s really just a punt on maybe you will get the big one ...

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