When to cash in NS&I Index-linked Savings Certificate?

PParka
PParka Posts: 260 Forumite
Name Dropper Academoney Grad First Anniversary Photogenic
in ISAs & tax-free savings
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
«1

Comments

  • bryanb
    bryanb Posts: 4,993 Forumite
    First Post First Anniversary Combo Breaker
    Is It fixed term?
    This is an open forum, anyone can post and I just did !
  • PParka
    PParka Posts: 260 Forumite
    Name Dropper Academoney Grad First Anniversary Photogenic
    No, not fixed term.
    It's a 5-year certificate, but can be cashed in at any time.
  • xylophone
    xylophone Posts: 44,322 Forumite
    Name Dropper First Anniversary First Post
    http://www.nsandi.com/savings-index-linked-savings-certificates
    terms and conditions and calculator.
  • PParka
    PParka Posts: 260 Forumite
    Name Dropper Academoney Grad First Anniversary Photogenic
    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
    pqrdef Posts: 4,552 Forumite
    PParka wrote: »
    Ahhh... school boy error.
    Waiting an extra month won't mean 3.2% will be used instead of 2.8%
    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.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • RobStaffs
    RobStaffs Posts: 308 Forumite
    First Anniversary Combo Breaker First Post
    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
    pqrdef Posts: 4,552 Forumite
    RobStaffs wrote: »
    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 ?
    Yes it will.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • kar999
    kar999 Posts: 706 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    edited 14 August 2012 at 7:06PM
    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,
    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
    bigfreddiel Posts: 4,263 Forumite
    kar999 wrote: »
    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,
    and then you can let it rollover for more tax free interest....

    fj
  • ffacoffipawb
    ffacoffipawb Posts: 3,593 Forumite
    Name Dropper First Anniversary First Post Photogenic
    bigfreddiel wrote: »
    and then you can let it rollover for more tax free interest....

    fj

    The bad news is you can only do this once if there aren't any on general sale.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.6K Spending & Discounts
  • 235.1K Work, Benefits & Business
  • 607.8K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards