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Are Index Linked Nat Saving Certificates a good buy?
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penrhyn
Posts: 15,215 Forumite
Started a thread the other day about these, sunk like a lead balloon, so I thought I'd ask again?
I'm thinking say 2-5 years, having used up my ISA allowance?
I'm thinking say 2-5 years, having used up my ISA allowance?
That gum you like is coming back in style.
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They are good if you dont want to invest (as investment returns are potentially higher over the long run). They are also good for the cash element of your portfolio even if you do invest. Higher rate taxpayers gain the most by using them.
A basic rate taxpayer using them but rolling them over into new ones each time they mature could do better with investing but as a cash option, they are very good.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
A brief summary of the pros and cons:
Pros:
Tax-free
Guaranteed by the Gov't
Guaranteed to beat inflation
Can potentially save up to £60k per year.
Cons:
Minimum lock-in of 1yr to get any interest.
Best to keep to maturity of 3 or 5 years, to get higher return.
I consider them a must have for most portfolios.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
Seems they would be a better deal than most in times of high inflation? -- (which seems to be likely now?)0
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LisbonLaura wrote: »Seems they would be a better deal than most in times of high inflation? -- (which seems to be likely now?)
Absolutely correct. This is especially true at the moment, when there is every indication that a BofE rate cut is likely, regardless of rising inflation.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
Thxs Jonbvn. It's all a matter of timing, I wonder when I should jump? --- & when the inflation arrives big time am I cynical in thinking that RPI index linked deals would become unavailable?
(Apols. to original poster for hi-jacking the thread)0 -
If your a 40% tax bander and are not a investor then yes its a top way to save.0
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Does anyone know how often they release new issues of these?0
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Does anyone know how often they release new issues of these?
Usually, there are two issues per year of each of the 3 & 5-yr certs. This allows you to save up to 60k per year. The other thing I like is that when the certs reach maturity you can reinvest into new certs and still invest another 15k into the same issue.
As people are saying, these certs are definitely worth considering when things are looking gloomy.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
I think they are a great idea, they have been covered in great detail on this discussion thread:
http://forums.moneysavingexpert.com/....html?t=5287810
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