National savings certificates

Aurelea

My NS&I 3 year RPI linked savings certificates are nearly time expired given that they are only 1% and linked to RPI which is very low but tax free does anyone consider they are worth renewing? Maybe inflation will take off again with all the money thats being printed any guesses?

MrBeans

Who knows! I've just been offered a 2 year Bond at NatWest paying 4.25%. Taxable, but what would the RPI have to rise by over the next couple of years to equal that return if the money was put into NS&I index linked instead?

Aurelea

According to my very falible calculations 2.6% in both of 2 years from zero now.

martinman3

There is a slight complication in that the rate on top of index-linking is different for each year and between the 3yr and 5yr certificates.

By my calculations

For the 5yr it is as Aurelea says about 2.6% (2.65 year 1 , 2.55 year 2) for a basic rate taxpayer, about 3.45% (3.5% year 1, 3.4% year 2) for a non-taxpayer and about 1.75% (1.8% year 1, 1.7% year 2) for a higher rate taxpayer.
For the 3yr it is about 2.5% (2.55 year 1 , 2.45 year 2) for a basic rate taxpayer, about 3.35% (3.4% year 1, 3.3% year 2) for a non-taxpayer and about 1.65% (1.7% year 1, 1.6% year 2) for a higher rate taxpayer.