Prize bonds - could it be you? Almost certainly not

“I would love to know the situation regarding our State’s prize bonds,” says a reader called Derek.

“Myself along with thousands of Irish families purchased them for themselves or as gifts over the last few decades. Apparently they are no longer doing the weekly draws and I would love to know how to redeem my invested money with them. Any help would be greatly appreciated.”

Well the good news for Derek is that the weekly draws have not gone anywhere. We visited the prize bond website, statesavings.ie, and were assured that we are in line to win up to €50,000 in the weekly draws, with the next one taking place on Friday.

There is also a grand prize of €250,000 on offer in additional draws which take place four times each year.

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Prize bonds also remain as popular now as they were when the first ones were sold in 1957, with about €600 million of them bought each year. The total value of the prize bonds held by Irish people is well over €4 billion.

About 220,000 prizes worth around €15 million are won each year, with the average prize coming in at just under €70.

More than 4,000 prizes are awarded weekly, with all the money won being tax free.

It is also worth pointing out that the percentage rate currently used to calculate the prize fund is just 0.35 per cent, which is considerably less than the 1.75 per cent return offered a decade ago.

The other bad news is your chance of winning big is insanely low, something which might explain why Pricewatch has won just €25 once despite owning €100 worth of prize bonds for more than 35 years.

And what are those odds? Well, if you have €25 worth of bonds, you have a 140 million or so to one chance of winning the big prize, which is roughly the same odds as winning the Euromillions lottery. The odds of winning our national Lotto, meanwhile, are about 10 million to one.

The Euromillions jackpot and the regular Lotto jackpots – even at their smallest – will go a lot further than the very top prize bond prizes on offer.

[ Are you mad to keep your money in prize bonds? ]

The odds change quite significantly depending on how many prize bonds you have. If you invest €10,000, the chances of winning the top prize falls to 350,000 to one, which is still a long way from likely and given the impact inflation is having on savings you would need to have won at least €900 of your €10,000 worth of prize bonds last year just to have kept ahead of rising prices.

Mind you, unlike lottery tickets your prize bond ticket lasts forever and you keep getting entered into the draws week in, week out. You don’t have to bother checking to see if you have won, either as the prize bonds people will write to you to alert you to your good fortune. And you can always cash in your tickets.