Act now to get best savings % this year - index-linked savings from National Savings

david78

I agree with Ray. It should be fine, you should have something within a week. If its your first purchase they will send you a form to sign and return. You would then get your certificate the week after. The purchase date will be the date you applied online. They are sometimes slow taking money from you account ( no bad thing ). You only need to sign the form on the first purchase, subsequent purchases do not need this.

Andreg

I fully agree with the OP. Index linked certificates are an excellent investment and we should be transferring as much money from cash ISAs into them as possible.

The RPI for investments made in January was 216.6, but the following month RPI has already been announced as 218. Then for the rest of this year we have a number of things to look forward to which will increase the RPI:
1) the increase in VAT to 17.5%
2) further increases in VAT after the election
3) increases in mortgage rates as the mortgage companies are forced to increase savings rates to attract back the huge outflows of savings they are suffering
4) increases in mortgage rates as a result of base rates rising to head off inflation

I calculate that investment in index linked certificates made back in March last year has earned an AER of 5% so far and look forward to similar returns over the next six months at least. After that who can say what will happen to inflation - but you can always cash in the certificates and switch back to cash ISAs.

P.S. The increase from 216.6 in January to 218 in February is equivalent to an annual rate of 8%!

P.P.S. In fact of course the amount you can move back from index linked certs to cash ISAs is limited by the annual allowance.

Cliddy

Quick question, how do you transfer money from Cash ISA's into these. Surely there is no transfer method ?

glider3560

Cliddy wrote: »

Quick question, how do you transfer money from Cash ISA's into these. Surely there is no transfer method ?

You would have to withdraw the money from the ISA. This means you would lose the ISA benefit on that money.

ourkid025

Sounds good, may reinvest in both the 3 and 5 Yr ones on Monday. Got a few questions though...

* Can new certificates be cashed in after 12 months (without losing interest) or is it just reinvested certificates?
* Does anyone have a link showing the RPI index rates so I can see the last 12 months?

glider3560

ourkid025 wrote: »

* Does anyone have a link showing the RPI index rates so I can see the last 12 months?

Even better than that, here is the RPI since 1948!
http://www.statistics.gov.uk/StatBase/tsdataset.asp?vlnk=229&More=N&All=Y

chaffinch

Hi there. So my question is how the interest rate you get relates to the date you buy the certificates. If you use the calculation tool, the return you get seems to depend simply on the month you put the money in. So for instance, if you bought on the 10th or 31st of December 2007, the calculator gives you the same return but one day later, 1st of January 2008, you get a different return. OK, but the figures for RPI come out in mid-month. So, I'm confused what RPI value relates to a sale? If I bought today on the 31st January 2010, do I use the RPI value announced a fortnight ago (for December 2009) or do I have to wait until Mid-Feb to find out the January rate and I get that? The latter makes more sense in terms of buying but if that is the case, I can't see how when you get to the end of the term they can pay you what you are owed as you won't know the final RPI level until up to 6 weeks after your certificate matures? Can someone help me understand where I have misunderstood this please? Many thanks!

Andreg

chaffinch wrote: »

Hi there. So my question is how the interest rate you get relates to the date you buy the certificates. If you use the calculation tool, the return you get seems to depend simply on the month you put the money in. So for instance, if you bought on the 10th or 31st of December 2007, the calculator gives you the same return but one day later, 1st of January 2008, you get a different return. OK, but the figures for RPI come out in mid-month. So, I'm confused what RPI value relates to a sale? If I bought today on the 31st January 2010, do I use the RPI value announced a fortnight ago (for December 2009) or do I have to wait until Mid-Feb to find out the January rate and I get that? The latter makes more sense in terms of buying but if that is the case, I can't see how when you get to the end of the term they can pay you what you are owed as you won't know the final RPI level until up to 6 weeks after your certificate matures? Can someone help me understand where I have misunderstood this please? Many thanks!

For certificates maturing in January the RPI that was published in mid December is used. I believe that means if you invest in January2010 the base index that is used for calculation of the interest will be 216.6 (published 15Dec2009) , but if you invest in February the base index will be 218 (published 19Jan2010).

So, to boost your return, you should always check the index level if you are investing after the RPI is published. If the RPI is unusually lower than the previous month, wait until the first of the next month before investing. If (like this month) the RPI is sharply higher than the previous month, get invested quick.

P.S. It seems someone doubts my accuracy. So here's my source: http://www.nsandi.com/files/asset/pdf/archived-press-releases/pr2004481.pdf

chaffinch

Thanks very much - that is very helpful. So what we are saying here is that there is quite a significant lag in the figure you get - if I buy today (31 Jan) the basis of my investment is the Nov 2009 figures? Excellent!

chaffinch

By the way, have you seen this written down anywhere? I couldn't see this explained on the NSANDI website but maybe I am just blind!?!