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  • FIRST POST
    • PParka
    • By PParka 14th Aug 12, 10:08 AM
    • 182Posts
    • 65Thanks
    PParka
    When to cash in NS&I Index-linked Savings Certificate?
    • #1
    • 14th Aug 12, 10:08 AM
    When to cash in NS&I Index-linked Savings Certificate? 14th Aug 12 at 10:08 AM
    I'm about to cash in an NS&I Index-linked Savings Certificate but have totally confused myself trying to work out the best date to do this.

    I purchased it on 25 August 2011 and was going to cash it in on 25 August 2012.
    However, the RPI figure has just been released and it's gone up from 2.8% to 3.2%

    So, what is the best date to cash it in ???
    If I wait until the 1 September, will I get the higher rate?
    Or do I need to wait until the 25 September??

    I've looked through the NS&I T&Cs, but I'm still unsure.

    Thanks
Page 1
    • bryanb
    • By bryanb 14th Aug 12, 10:10 AM
    • 4,764 Posts
    • 3,470 Thanks
    bryanb
    • #2
    • 14th Aug 12, 10:10 AM
    • #2
    • 14th Aug 12, 10:10 AM
    Is It fixed term?
    This is an open forum, anyone can post and I just did !
    • PParka
    • By PParka 14th Aug 12, 10:29 AM
    • 182 Posts
    • 65 Thanks
    PParka
    • #3
    • 14th Aug 12, 10:29 AM
    • #3
    • 14th Aug 12, 10:29 AM
    No, not fixed term.
    It's a 5-year certificate, but can be cashed in at any time.
    • xylophone
    • By xylophone 14th Aug 12, 12:06 PM
    • 17,897 Posts
    • 9,985 Thanks
    xylophone
    • #4
    • 14th Aug 12, 12:06 PM
    • #4
    • 14th Aug 12, 12:06 PM
    http://www.nsandi.com/savings-index-linked-savings-certificates
    terms and conditions and calculator.
    • PParka
    • By PParka 14th Aug 12, 12:37 PM
    • 182 Posts
    • 65 Thanks
    PParka
    • #5
    • 14th Aug 12, 12:37 PM
    • #5
    • 14th Aug 12, 12:37 PM
    Ahhh... school boy error.
    Just realised it isn't going to make any difference when I cash it in.
    The first years interest is based on the RPI figure on the anniversary of the purchase. Waiting an extra month won't mean 3.2% will be used instead of 2.8%
  • pqrdef
    • #6
    • 14th Aug 12, 2:00 PM
    • #6
    • 14th Aug 12, 2:00 PM
    Ahhh... school boy error.
    Waiting an extra month won't mean 3.2% will be used instead of 2.8%
    Originally posted by PParka
    In a way it does. If you were to hang on until the 13-month anniversary, you could reckon the RPI uplift as

    Jun 2011-Jun 2012, 12 months, 2.806%, plus
    Jun 2012-Jul 2012, 1 month, 0.124%

    plus a smidgeon of bonus and a smaller smidgeon for compounding.

    Or you could reckon it as

    Jun-Jul 2011, 1 month, -0.223%
    Jul 2011-Jul 2012, 12 months, 3.153% (the new headline figure, before rounding)

    Same end result.

    If the last month had been a bad month in absolute terms, it would pay to hang on. But actually it's only been a bad month in relative terms - prices have gone up a little bit at a time of year when they normally go down. But they've still gone up less than the annual average, so this isn't a good month to hang on.


    In general, since odd months aren't seasonally adjusted, it tends to pay to hang on through a high season and sell before a low season. And this is the low season in spite of the headlines.

    Actually this is the first Jun-Jul RPI increase since 1990 and the biggest since 1983.
    • RobStaffs
    • By RobStaffs 14th Aug 12, 2:35 PM
    • 262 Posts
    • 43 Thanks
    RobStaffs
    • #7
    • 14th Aug 12, 2:35 PM
    • #7
    • 14th Aug 12, 2:35 PM
    Can someone confirm something for me. If you have deposited 15000 in year 1 and on the anniversary date you it is worth 15675. Will the interest at the end of year 2 be calculated on the 15675 figure? ie 15670* the RPI ?

    thanks
  • pqrdef
    • #8
    • 14th Aug 12, 3:29 PM
    • #8
    • 14th Aug 12, 3:29 PM
    If you have deposited 15000 in year 1 and on the anniversary date you it is worth 15675. Will the interest at the end of year 2 be calculated on the 15675 figure? ie 15670* the RPI ?
    Originally posted by RobStaffs
    Yes it will.
    • kar999
    • By kar999 14th Aug 12, 6:55 PM
    • 632 Posts
    • 243 Thanks
    kar999
    • #9
    • 14th Aug 12, 6:55 PM
    • #9
    • 14th Aug 12, 6:55 PM
    With no more ILSC's being issued this year, I'm happy to keep the benefit of the extra £15000k tax free element over and above my ISA allowance at a stilll decent rate and with easy access .. at least until my next annual anniverary of May 2013,
    Last edited by kar999; 14-08-2012 at 7:06 PM.
    If the ball had gone in the net it would have been a goal.
    If my Auntie had been a man she'd have been my Uncle.
    • bigfreddiel
    • By bigfreddiel 14th Aug 12, 8:06 PM
    • 3,548 Posts
    • 1,575 Thanks
    bigfreddiel
    With no more ILSC's being issued this year, I'm happy to keep the benefit of the extra £15000k tax free element over and above my ISA allowance at a stilll decent rate and with easy access .. at least until my next annual anniverary of May 2013,
    Originally posted by kar999
    and then you can let it rollover for more tax free interest....

    fj
    • ffacoffipawb
    • By ffacoffipawb 14th Aug 12, 9:09 PM
    • 2,248 Posts
    • 1,413 Thanks
    ffacoffipawb
    and then you can let it rollover for more tax free interest....

    fj
    Originally posted by bigfreddiel
    The bad news is you can only do this once if there aren't any on general sale.
    • kar999
    • By kar999 14th Aug 12, 9:11 PM
    • 632 Posts
    • 243 Thanks
    kar999
    and then you can let it rollover for more tax free interest....

    fj
    Originally posted by bigfreddiel
    That's almost certainly a deciding factor as like ISA's once you withdraw your money thw tax free status is gone forever.
    If the ball had gone in the net it would have been a goal.
    If my Auntie had been a man she'd have been my Uncle.
    • zerog
    • By zerog 15th Aug 12, 1:18 PM
    • 2,208 Posts
    • 743 Thanks
    zerog
    and then you can let it rollover for more tax free interest....

    fj
    Originally posted by bigfreddiel
    If you let it roll over, you won't be able to cash it in early any more. See the T&C changes from today.
    • StevieJ
    • By StevieJ 16th Aug 12, 12:21 PM
    • 18,946 Posts
    • 31,758 Thanks
    StevieJ
    If you let it roll over, you won't be able to cash it in early any more. See the T&C changes from today.
    Originally posted by zerog
    See what you mean, good things don't last, it looks like they are trying to reduce the numbers with these certs. It seems that the govt think they can get their funding elsewhere at cheaper rates, but as I said, good things don't last You will have to be careful if you cash these in during term, if you do it just before an anniversary it could cost 15 months interest, more sneaky tricks from the Treasury?
    Index-linked Savings Certificates will start changing on 20 September 2012. What’s new?
    Here is a summary of what’s changing.
    Financial changes
    • penalty and loss of index-linking for cashing in early
      The penalty is equivalent to 90 days’ interest on the amount cashed in. And you’ll lose the index-linking on your whole Certificate for the investment year in which you cash in.
    • minimum balance of £100
      If you cash in part of your Certificate, you’ll need to keep at least £100 invested for the Certificate to remain open.
    • single annual rate of interest for each Issue
      We will pay a guaranteed rate of interest that stays the same for the length of the term (previously the annual rates started low and increased each year during the term).
    Last edited by StevieJ; 16-08-2012 at 12:27 PM.
    ĎHard as it is to say now.. I look forward to a United States of Europe, in which the barriers between the nations will be greatly minimised and unrestricted travel will be possible.í
    Winston Churchill 21st Oct 1942
    • Looter
    • By Looter 18th Aug 12, 8:34 PM
    • 130 Posts
    • 112 Thanks
    Looter
    To throw another spanner into the works, with the changes to the terms and conditions of fixed rate investments from NS&I, am I right in thinking that there will be no penalty if I cash in my index linked bond before 20 Sept 2012, but there will be if I cash in after that date? Also, does anyone think they have brought this rule in to encourage people to cash in their bond early with the way inflation is going?
    • brewerdave
    • By brewerdave 20th Aug 12, 9:55 AM
    • 3,848 Posts
    • 1,485 Thanks
    brewerdave
    To throw another spanner into the works, with the changes to the terms and conditions of fixed rate investments from NS&I, am I right in thinking that there will be no penalty if I cash in my index linked bond before 20 Sept 2012, but there will be if I cash in after that date? Also, does anyone think they have brought this rule in to encourage people to cash in their bond early with the way inflation is going?
    Originally posted by Looter
    MY understanding of the new rules is that the penalty will only apply if/when you roll over into a new issue AFTER the bond maturity date - the rules won't apply to early encashment of an existing bond whenever you cash in.
    This taken from the Q and A page on the site:-
    "What happens next?
    If you have an existing Index-linked Savings Certificate, donít worry. The changes will only affect you if your Certificate matures on or after 20 September 2012, and you choose to renew it for a further term. So you donít need to do anything yet.
    Weíll write to you around 30 days before your Certificate matures, to remind you that itís time to decide what to do with your money. Weíll include full details of the changes to your investment, together with information explaining your choices for renewing or cashing in."
    • oldvicar
    • By oldvicar 20th Aug 12, 5:20 PM
    • 1,069 Posts
    • 944 Thanks
    oldvicar
    In answer to OP, if cashing in soon then the best time is at its one-year anniversary. But only if you really have to since these things are currently irreplaceable.

    25 August falls on Saturday this year, Monday's a Bank Holiday, So Tuesday 28th August is the optimum time - put it in the post Friday/Saturday 24/25th, to arrive on the due date, or before with clear instructions to cash in on 28th.
    • Fella
    • By Fella 28th Aug 12, 11:19 AM
    • 6,930 Posts
    • 6,803 Thanks
    Fella
    Can anyone who has done this recently advise how long it took to receive their funds? (I know what the website says but am interested in how long it generally takes in practice).

    thanks
  • Sceptic001
    Can anyone who has done this recently advise how long it took to receive their funds? (I know what the website says but am interested in how long it generally takes in practice).

    thanks
    Originally posted by Fella
    I have always found NS&I admin very efficient. I haven't cashed in recently, but would assume that (subject to post etc. working OK) that they will meet or exceed their stated target (used to be eight working days - is it still the same?)
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