NS&I ILC Reinvestment

artha

Sorry for another thread on the NS&I theme.

Although it was touched on in one of the many similar threads I can't find it.

As I understand it:
- a maturing ILC can be reinvested in the latest issue available at maturity.
- the matured amount does not count towards your £15k limit for an issue

My question is, is the money reinvested treated in any way differently from new money invested at the same time?

I have one further question relating to my 3year ILC maturing 31/5/2010. If I choose to reinvest will the date of reinvestment be 31/5 or 1/6? i'e will my starting RPI value be that applicable in May or June?

StevieJ

I had one reinvested from November, the only difference I am aware of is the fact you can cash in in the first year without penalty.

Sceptic001

Reinvestment date is the same as the maturity date.

JamesU

artha wrote: »

I have one further question relating to my 3year ILC maturing 31/5/2010. If I choose to reinvest will the date of reinvestment be 31/5 or 1/6? i'e will my starting RPI value be that applicable in May or June?

Phone NSI and ask for the transfer on the maturity date of 31st May if possible. That way you may be able to lock in with the lower RPI of March. And if so, a return of 1.75% + 11 months inflation (whatever that might be) provided there is no deflation.

JamesU

artha

StevieJ wrote: »

I had one reinvested from November, the only difference I am aware of is the fact you can cash in in the first year without penalty.

Thanks. It's the without penalty bit that I had an inkling was the difference. Just to clarify that. Does that then mean it goes on a monthly basis i.e if, for whatever reason, I decided to cash it in after 6 months I would get an amount equivalent to whatever the change in RPI was over the 6 months + a proportion of the additional annual interest? Or is this just wishful thinking?

StevieJ

artha wrote: »

Thanks. It's the without penalty bit that I had an inkling was the difference. Just to clarify that. Does that then mean it goes on a monthly basis i.e if, for whatever reason, I decided to cash it in after 6 months I would get an amount equivalent to whatever the change in RPI was over the 6 months + a proportion of the additional annual interest? Or is this just wishful thinking?

As far as I am aware, yes, here is info from the NS&I site.

What happens at the end of the term?

We’ll write to you shortly before your Savings Certificate reaches the end of its term, to let you know your options.
You can then choose to:

• continue holding your investment for another term of the same length
• reinvest in an Index-linked Savings Certificate for a different term
• reinvest in a Fixed Interest Savings Certificate
• cash in your investment

If you want to continue your investment for another term of the same length, you don’t need to do anything. We’ll arrange it for you automatically. Or if you’d prefer to reinvest in a different term or type of Savings Certificate, all you have to do is contact us – there’s no complicated paperwork.
If at the end of the term you continue your investment:

• it won’t count towards your investment limit for new Certificates – you can still invest up to £15,000 tax-free in each new Issue on sale at the time.
• you can cash in your investment at any time – even within the first year of the new term – and still earn index-linking and interest.

If you don’t manage to reply to us by the end of the term, don’t worry – you will carry on earning index-linking and extra interest at the rate on offer at the time

artha

StevieJ wrote: »

As far as I am aware, yes.

Then reinvestment for me is the way to go. Thanks very much for the info. I struggled to get that level of clarification from the NS&I site

StevieJ

artha wrote: »

Then reinvestment for me is the way to go. Thanks very much for the info. I struggled to get that level of clarification from the NS&I site

You are welcome, I have updated my post above.

artha

StevieJ wrote: »

You are welcome, I have updated my post above.

I realise now that I was probably being a bit slow as I had read(as per your update) the info on the NS&I site but wasn't quite sure what it meant. I took it to mean that it would just attract the benefits that anyone putting new money in would get, so didn't see the benefit. I think that this is a further benefit of NS&I certs have for those unsure about whether to invest over the longer term than the initial, as this reinvestment option gives a great deal of flexibility if rates elsewhere look more promising.

Thanks again

Sceptic001

I am not normally a great fan of government departments, but I have to say that NS&I really are streets ahead of the banks and most building societies when it comes to customer service.

You do not get the feeling that they are trying to rip you off with dodgy terms and conditions, and they are always helpful when you contact them. :A

barak

Sceptic001 wrote: »

I am not normally a great fan of government departments, but I have to say that NS&I really are streets ahead of the banks and most building societies when it comes to customer service.

Erm - mostly perhaps, but at times they can be slow in paying withdrawals "owing to a backlog", which can be costly.