Leeds Building Society inflation beating ISA

villafan10

Leeds building society have just introduced an inflation beating ISA that guarantees to pay out 2.25% above inflation. Essentially it is a 2 year fixed rate ISA split into 2 so after the first year you can make withdrawals. Worth looking into.

For those already with full ISA allocation for the year, there is also an inflation beating bond.

Apologies if this has previously been posted.

neas

2 years is a long time to lock in money. What if inflation RPI calculations get changed? i.e government changes spin so we start getting perceived lower inflation?

or how about deflation? :P

negative RPI :O.... so you pay them? :P

RayWolfe

Were you born the that level of optimism or did 80 years of reading the Daily Mail change you?

neas

I'm more worried about day to day money if we sustain this level of RPI inflation. Inflation is Percent change year to year or month to month i guess.

To sustain at 5% growth year to year on average everythin would have to increase on average over those 2 yeas by 5% twice.

I.e Loaf of bread: 100 - 2007
5% inflation Load of Bread: 105 -2008
5% inflation Loaf of bread: 110.25 -2009

Have to sustatin the price increase... so spikes in prices are not constant. Still Bit of a gamble... just wondering how a bank could maintain this level of interest.