An investigation into Bonus Bonds prizes reveals near-impossible odds on big prizes and long odds on small prizes

A statistical investigation by MoneyHub into Bonus Bonds suggests the average bond holder is failing to keep up with inflation and that $0 is the most common prize won. Bonus Bonds fully discloses that 99.91% of all prizes awarded are worth $50 or below. With $3.4 billion dollars invested, Bonus Bonds is upfront in confirming the chance of any Bonus Bond winning a prize will range between 1 in 20,000 to 1 in 35,000. MoneyHub’s research looked at the odds of winning each prize, the effects of the inflation rate on Bonus Bonds and investment alternatives.

MoneyHub’s senior research Christopher Walsh said:

“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”

“98% of Bonus Bonds win a cash prize of $0, and with inflation running around 2%, a $1,000 Bonus Bonds investment would be worth $200 less after 10 years (in real terms) if an investor failed to win a prize in that time”.

“With Bonus Bonds assigning cash prizes at a rate of 1.4% of total money invested, a $10,000 Bonus Bonds investment is estimated to win four $20 cash prizes per year, generating an $80 return on investment. The same investment in a term deposit interest rate, which is certain to be paid, could earn $300+ after tax”.

MoneyHub published a number of prize winning forecasts basing its research on the prize winnings reported for November 2017. The dedicated page would be updated on an ongoing basis.

About MoneyHub.co.nz: MoneyHub was established in 2017 and is dedicated to making financial product choices easier. MoneyHub is a journalist online resource with the aim of providing New Zealanders with the best money guides, tips and tools.

Full story link: Bonus Bonds

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