MSE News: Maximise your savings as inflation bites
Comments
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There is no way that MSE should be headlining
5.9% savings equivalent for basic rate taxpayers (7.8% higher rate)
Lock cash in for 3 years with NS&I's index linked savings & get inflation plus 1% = 4.7% TAX-FREE :eek:
even with the caveats in the article text. Its just not true!
The clear implication from the headline is that you are looking at the equivalent of a 3 year fixed rate savings acc, and that's just irresponsible-given the wide range of expertise or lack of it in the people who use this site.
I know - caveat emptor and all that - still irresponsible headlining -and disappointing given the good advice normally provided0 -
However I think I am right in saying the lowest it has ever been is +0.7% in which case the current +1% rate is nothing special.
My memory isn't the best but I am pretty sure that long ago there were issues paying RPI increases + 0%.
As recently as 2008 they were paying RPI increases + 0.25% & 0.35% for 3 and 5 years respectively.
http://en.wikipedia.org/wiki/Index-linked_Savings_Certificates0 -
Oops, starting to think I may have made a mistake here. I rather foolishly (perhaps?) moved all my savings from an ISA to NS&I 3 year, now I'm only 25 so that's not a whole lot but the 4.7% grabbed my attention, I know my HSBC ISA has been giving me negligable interest (just worked it out apparently 0.2% PA) so I don't think this will do me any harm on that front but I do wonder if perhaps I could have invested this better.0
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Oops, starting to think I may have made a mistake here. I rather foolishly (perhaps?) moved all my savings from an ISA to NS&I 3 year, now I'm only 25 so that's not a whole lot but the 4.7% grabbed my attention, I know my HSBC ISA has been giving me negligable interest (just worked it out apparently 0.2% PA) so I don't think this will do me any harm on that front but I do wonder if perhaps I could have invested this better.
maybe have chosen to move it into a better FRISA, there are a few around like nationwide's 3 year at 4.4%. maybe its just under the NS&I interest rate now, however likes been getting said on this post, at least the FRISA is guaranteed.like ken robinson says, we shouldn't be scared to make mistakes, its the only way we learn.[STRIKE]Beggars cant be choosers, but savers can![/STRIKE]That used to be the case :mad:0 -
For what it's worth, I now use these index linked certs as a home for medium term emergency funds. My plan is to buy every six months, for three years, until I have stashed away the sum I have in mind. Thereafter, there will be a certificate maturing every six months which I can either roll-over, spend, or re-direct elsewhere if interest rates really take off. In the meantime, at least these savings will keep up with inflation. And as a HRT payer, the tax-free status is another bonus.
I visualize this as a sort of "water wheel with buckets", revolving over a three year cycle and pouring out every six months. Might be daft, but it has helped me semi-automate this bit of my savings. The same thing could of course be done with any savings account, but by having something mature every six months, it sort of forces you to make a decision and look at the best home for the savings.0 -
For what it's worth, I now use these index linked certs as a home for medium term emergency funds. My plan is to buy every six months, for three years, until I have stashed away the sum I have in mind. Thereafter, there will be a certificate maturing every six months which I can either roll-over, spend, or re-direct elsewhere if interest rates really take off. In the meantime, at least these savings will keep up with inflation. And as a HRT payer, the tax-free status is another bonus.
I visualize this as a sort of "water wheel with buckets", revolving over a three cycle and pouring out every six months. Might be daft, but it has helped me semi-automate this bit of my savings. The same thing could of course be done with any savings account, but by having something mature every six months, it sort of forces you to make a decision and look at the best home for the savings.
i never thought of it that way, it may be worth doing something like that when i have some spare money to do it with, i dont think i could do it just now though as in a months time i can dump most of my savings in a cash ISA with the new £5200 limit[STRIKE]Beggars cant be choosers, but savers can![/STRIKE]That used to be the case :mad:0 -
My memory isn't the best but I am pretty sure that long ago there were issues paying RPI increases + 0%.
As recently as 2008 they were paying RPI increases + 0.25% & 0.35% for 3 and 5 years respectively.
http://en.wikipedia.org/wiki/Index-linked_Savings_Certificates0 -
For what it's worth, I now use these index linked certs as a home for medium term emergency funds. My plan is to buy every six months, for three years, until I have stashed away the sum I have in mind. Thereafter, there will be a certificate maturing every six months which I can either roll-over, spend, or re-direct elsewhere if interest rates really take off. In the meantime, at least these savings will keep up with inflation. And as a HRT payer, the tax-free status is another bonus.
I visualize this as a sort of "water wheel with buckets", revolving over a three year cycle and pouring out every six months. Might be daft, but it has helped me semi-automate this bit of my savings. The same thing could of course be done with any savings account, but by having something mature every six months, it sort of forces you to make a decision and look at the best home for the savings.
What you are doing is very sensible. It is very similar to something called a "bond ladder."
http://www.investopedia.com/articles/02/120202.aspIn case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
yeah i keep doing that, dont know why i keep thinking £200; maybe cos its a more even number[STRIKE]Beggars cant be choosers, but savers can![/STRIKE]That used to be the case :mad:0
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