NS&I Index-linked bonds

nrsql

Someone posted recently that they had closed a certificate and had received no interest because the RPI wiped out the increment.

I thought that RPI was considered as a min of 0% for calculations whether an anniversary or mid year but re-reading the t's & c's I can't find anywhere that it says that.

>> If you cash in your Certificates any time after the first year, you will earn index-linking and extra interest for each complete month you’ve held them.


>> the anniversary value on that anniversary date plus:
(a) index-linking for each complete month from that anniversary date to the date of repayment; and
(b) 1/12th of the annual interest for each complete month held from that anniversary date.
This paragraph does not apply to any month not completed before the maturity date.


For the anniversaries
>> (b) 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.

Unfortunate comma but think that means preceding anniversary value plus interest rate.

RayWolfe

So did I. Perhaps the poster you cite closed before the first anniversary, or was confused.

soulsaver

If you started one last year, say, November when oil was $100+ barrel, and the knock on effect was high rpi's - my theory was/is that you are unlikely to gain any indexation at the 1st anniversary as the strike is likely to excede the anniversary rpi = deflation. You would still get c0.9% (net)interest tho. My view was that I'd cash it immediately, get zero interest but still be better off 'cos I'll get 6% (gross) til November in a fix rate ac I've got that still allows deposits (Halifax Guaranteed Reward Saver).
If inflation was back or forecast in Nov then I could buy NS&I certs again.