NS&I Index-Linked Savings: Q&A

RayWolfe

New issues coming out on 7th April.

RayWolfe

OneADay wrote: »

Well I just done a calculation on N&I site

£25000 say invested on 1st jan 2009 - value now on 3 year term is £25475

Same £25000 in a 3 year bond in a bank paying 4.40% would mean I would now have £25880 after 20% tax.

Hindsight is a wonderful gift. You should sell your knowledge.

OneADay

RayWolfe wrote: »

Hindsight is a wonderful gift. You should sell your knowledge.

Hindsight or the fact that I do have money invested in high rate bonds from end of 2008. Ta!

RayWolfe

No, doing that was foresight.
If you know what inflation will be for the next 3 or 5 years, could you let us know?

john_s_2

MsDee wrote: »

I'm interested in finding out why if you invest in March rather than January you stand to gain a lot more in interest. Does anyone know why March seems to be the stongest month to invest out of all the calendar year?

Not sure where you got that from? March is used as an example in the article, but it's purely an example. They mention January because it's the value of RPI in January that is used for Index Linked Certificates bought in March (ie there's a two month lag).

Or have I misunderstood you?

OneADay

RayWolfe wrote: »

No, doing that was foresight.
If you know what inflation will be for the next 3 or 5 years, could you let us know?

Ask Darling Gordon (they are good at plucking numbers of the air)... I only care about the interest rates on bank accounts !

nondom_3

I just spoke to Karen at NS&I, she said that interest rates are calculated:

RPI Change + 1pc

As inflation recently jumped to 3.7pc, now would be a really bad time to apply (like buying at the top of the market), unless of course you expect inflation to keep on rising even higher.

To beat 4.75% gross (in a 5 year bond with Halifax), inflation would have to average over 7.45% in the same period (if I was to invest now into a 5 year NS&I issue).

Am I correct in this thinking? Do people really think it's a possibility that inflation could get this high? (and stay this high for 5 years?!)

RayWolfe

OneADay wrote: »

Ask Darling Gordon (they are good at plucking numbers of the air)... I only care about the interest rates on bank accounts !

You and I can trade witticisms for ever, but what is the point?
My strategy is to have a balanced portfolio of investments and savings, part of which is a proportion of NS&I Index Linked.
You have a different strategy, I wish you luck with it.

JamesU

nondom wrote: »

To beat 4.75% gross (in a 5 year bond with Halifax), inflation would have to average over 7.45% in the same period (if I was to invest now into a 5 year NS&I issue).

Interesting. Could you clairify the maths?

dov

nondom wrote: »

I just spoke to Karen at NS&I, she said that interest rates are calculated:

RPI Change + 1pc

It's RPI + 1%. Not sure where you or karen got the word change from.

I'm with JamesU, I have no idea where you've got that calculation from or what it means.