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

martinman3

martinman3 wrote: »

Aaargh ! The NS&I online calculator has now been converted to Adobe Flash for no good reason and I have the Flash Add-On disabled by default.

Do they believe that their customers will be happy to download an optional browser add-on (and manage to de-select the optional Google Toolbar download) just to get an approximate valuation ?

No is the answer to that question as the NS&I online calculator is now back how it was with no sign of Adobe Flash. :T

C_Mababejive

So are we saying then that buying the current crop of index linked certs (rpi +1%) is a no brainer?

ViolaLass

fred101 wrote: »

I bought my certificate on 15th Jan and the calculator shows that it has increased in value due to the 218 figure published on 19th Jan (ie its base value is the Dec figure of 216.6).

Right then, am slightly confused on two counts.

1. What's all this 216/218 stuff? I've only ever seen inflation quoted as 3% (as an example). Does 216 mean 2.16%?

2. As I understand it, the interest rate you're paid each month will change according to inflation. Is it therefore really worth getting too excited about what the rate is each month? I understand the long term figures are important but short term, wouldn't you lose more by keeping the money out (and therefore in an instant access account, ready to be invested) than you would by investing?

Apologies if I've said something stupid, this is a new area for me.

Andreg

Violalass, the retail prices index (i.e. RPI) is a number that is published in the middle of each month that shows the cost of living during the previous month. It is called an index because it is calculated relative to the cost of living in January 1987. The Open University is better at explaining than I: http://openlearn.open.ac.uk/mod/resource/view.php?id=164365

For investments in Index Linked Certificates made in February 2010 the base index is 218. (That means prices are on average 2.18 times higher than they were in 1987.) If inflation over the year is 5%, the index will be 218x105%=228.9.

If the index falls unusually sharply from one month to the next, its worth waiting to invest in index linked certificates at the lower level. There's no point making an avoidable loss in your first month - unless you think that the pattern will be repeated in a year's time.

ViolaLass

Thanks for that Andreg, makes a lot more sense now.

Having looked at the NS&I website, I'm not clear on whether the interest rate that applies in the month that you open the bond is then your interest rate for the year (which is what the website appears to say) or whether you get the new interest rate each month (which is what you appear to be saying) i.e. is it fixed or variable?

ManAtHome

It's variable, but they often use the latest month as an advertising blurb (unless it hasn't been a 'good' month), eg

Earn 4% tax free on your savings**

**providing RPI remains at it's current level for the next 3 years or so.

Jonbvn

RayWolfe wrote: »

Stop editing when I'm replying
£15K per person, per issue ... 15 at 3 years and 15 at 5 years times two of you ...

These certificates can also be held in trust, effectively doubling the £60k (for a couple) limit to £120k. You need a special trustee application the first time you invest as a trustee.

http://www.nsandi.com/products/ilsc/tandc.jsp
21. Trustees. You may buy and hold Certificates as a trustee either by yourself or jointly with one or more other trustees. Corporate trustees may also buy and hold Certificates. The Certificates can be held by the trustee(s) only or jointly with the beneficiary(ies).

Arthurian

Jonbvn wrote: »

These certificates can also be held in trust, effectively doubling the £60k (for a couple) limit to £120k. You need a special trustee application the first time you invest as a trustee.

http://www.nsandi.com/products/ilsc/tandc.jsp
21. Trustees. You may buy and hold Certificates as a trustee either by yourself or jointly with one or more other trustees. Corporate trustees may also buy and hold Certificates. The Certificates can be held by the trustee(s) only or jointly with the beneficiary(ies).

That's interesting. You mean as a trustee for children, or can you be a trustee for anyone, even another adult? And when they are cashed in, would the payment be to you, or to the person you are holding them for?

Jonbvn

Arthurian wrote: »

That's interesting. You mean as a trustee for children, or can you be a trustee for anyone, even another adult? And when they are cashed in, would the payment be to you, or to the person you are holding them for?

Basically as a trustee for anyone. The money would go to the person named in the trust deed. So if I was holding them in trust for you, you would get the money. It is usual for couples to hold them in trust for each other IYSWIM.

You would need some legal assistance to set up the trust.

ktee_uk

Ive got some index linked certs that will mature in march and june this year. Will they automatically get re-invested into the lates issues or just roll over keeping the current rate of interest?