Don't cash-in an NS&I Index Linked certificate mid-way between aniversaries

robpitt

Don't cash-in an NS&I Index Linked certificate mid-way between aniversaries as the RPI has fallen and you'll get 0 interest, 0 growth.

Maybe that's been said before but I just got bitten.

The issue is that the fall in RPI has anhilated the interest component completely. If you wait till after an aniversary (or maturity) then the fall in RPI fall gets ignored and interest is then credited; cash out sooner and the fall offsets the interest and given the current fall that mean 0 growth even if you would have been entitled to it had the RPI not fallen.

RayWolfe

Yep, that's always been the terms.

soulsaver

Depends what you can get, doesn't it? And how long its been in.
I cashed mine and accepted nowt for the few months I had it open while rpi plunged, but put it in a 6%(gross) fix which I had available accepting additional deposits for another 7 months which was better than the (less than) 1% I was going to get if left 'til its anniversary.
BTW super quick receipt of my funds back too - posted redemption claim 1st class on 20th, funds in my account 24th.

MiserlyMartin

I am a little confused about how leaving the account until maturity will cancel out the negative rpi effect. Surely rpi being negative cannot reduce your capital (or interest)?? Can someone explain how this works please?

Lansdowne

MiserlyMartin wrote: »

I am a little confused about how leaving the account until maturity will cancel out the negative rpi effect. Surely rpi being negative cannot reduce your capital (or interest)?? Can someone explain how this works please?

You are right that the capital, or interest once credited, can't be reduced. The NS&I terms say the anniversary value can never be less than the original plus the advertised interest %, and the same on maturity. But if cashing in part way through a year (which of course is not the purpose of NSCs) there is no such guarantee.

nrsql

Must admit I assumed you would get the prorata increment if RPI fell since the anniversary. Still it's not that much loss.

>> any anniversary value will never be less than the preceding anniversary value or, in the case of the first anniversary, the purchase price, together with interest at the relevant rate for the year.

Guess I assumed that applied to the monthly valuation too.
Anyway I'm waiting for the boe rate drops to be out of the equation and RPI rises again - and then when the boe rate starts to rise .