Which is the better investment strategy? Premium Bonds or National Lottery?

Say I had 拢2,000 to invest. As part of my portfolio (which includes a range of investment types of differing risk and return), I want a low risk investment, which has the potential for large returns, and I am prepared to take the hit on inflation as a trade-off. Which is the best strategy across the following two criteria:

- Best average return from the strategy
- Likelihood of making 拢1million from the strategy

Strategy 1: Invest the 拢2,000 in Premium Bonds.
Strategy 2: Invest the 拢2,000 in a bank account (say 5.5% interest rate) and spend the interest earned each month on National Lotto tickets (about 2 per week).

In the scenario you give it has to be all in Premium bonds because you get your stake money back, anything else would be a no brainer


.

A VERY WELL BALANCED MUTUAL FUND WITH LOW FEES

Go for Capital Bonds - 5% fixed interest tax free. Much better then premium bonds. My 拢1000 of premium bonds have got me 拢100 of interest over 10 years (so 拢10 per year therefore 1%).
I have never won a penny on lottery tickets so if anything they are a worse investment.

National lottery..no one wins much on premium bonds.

I'm not sure on thw exact maths of your situation but there is a good article here:

http://www.moneysavingexpert.com/cgi-bin...

The gist of Martins article is that premium bonds aren't that good really. But then neither is the lottery. So if you really want to gamble rather than invest, then at least you never lose your money when playing the premium bonds.

Premium Bonds i say - whatever happens, you can always get your original 'stake' back, so you can't lose really. Also the more you have, the more chance you have of winning and i suppose thats an incentive to keep saving money? good luck

I've had 拢1500 bonds for two years and have won 拢50, 拢50 + 拢100. I know its not a good return but the last two sums were won in the same month so you can imagine my heart rate once I'd opened the first knowing i had another envelope to open.......
Anyhow the odds of winning 拢10 on the lottery are ridiculous you would be best having a go in the pub to pick the bonus ball... lots more fun for your dosh....

all investment has some risk attached to it.i dont class premium bonds as investment as their is no risk involved and you get the same money back when you cash them in.as for banks,rates can also go down.it depends what your looking for.if you just want to make money and are not in a hurry buy premium bonds.the more you buy,the better your chances.i have them myself.you dont get much return in a bank to worry about unless its a large sum.

We are talking about non-professional advice here?

Firstly that doens't exist a low risk investment with the potential for large returns...

The general rule is PR1=PR2
Where PR1= Potential Risk and PR2 = Potential reward
Low risk=Low reward
High Risk=high reward.
Conversely
The higher the potential for reward the higher the potential for losing your money.

Go with Option 3 spend that on a holiday to Africa. or learn to scuba dive - chicks dig men in kinky rubber suits...Divers do it Deeper!!!

Bonds win out hands down.

*it has to be premium bonds as while you are investing your money and stand the chance of wining more money it does not gain interest as least you can draw it out again and there is no risk of loosing it.with the lottery you may be lucky and get a big win or you may loose the lot and have nothing i return.

either way you will retain your original capital, however you will have more chance on winning on the PB

Invest in stocks, here's a tip: TMC.L take it or leave it.
3 quid now, 10 quid by 2008.

Can't see why you'd want to do either.
You want to put some money 'out there' and see what happens to it?
Why not loan it? There are sites like Zopa that make small loans to people who can't get loans through the usual channels. You set the interest rate and take the risk as to whether you get your money back. The potential is for a win win situation and you help somebody into the bargain!

bonds...no doubt!!

I think they say that the usual return on premium bonds is around 4%. You never know you might get lucky. Forget the lottery