Ns&i

philbostavros

Hi

I was thinking of investing in another 3 year NS&I Index Linked Savings Cert (3 year), as I put £15k in in March. (need to do this before 1st June to take advantage of recent RPI increases)

The thing is, I will need to move the money from my A&L savings account (iss5) which currently earns 3.15% until mid July.

So, would I be better off leaving the money there until the rate drops and then moving to NS&I or doing it now?

Thanks

Jonbvn

It is impossible to provide an answer, since nobody knows what inflation will do in the future.

IMHO, I think inflation will likely remain quite high and the NS&I certs will easily beat your savings account. However, I could be wrong.

In such circumstances, I usually hedge my bets and put half the money in NS&I and leave the rest where it is.

CLAPTON

philbostavros wrote: »

Hi

I was thinking of investing in another 3 year NS&I Index Linked Savings Cert (3 year), as I put £15k in in March. (need to do this before 1st June to take advantage of recent RPI increases)

The thing is, I will need to move the money from my A&L savings account (iss5) which currently earns 3.15% until mid July.

So, would I be better off leaving the money there until the rate drops and then moving to NS&I or doing it now?

Thanks

why do you need to decide by June?
why will the historic increase in inflation make any difference to you?

Sceptic001

CLAPTON wrote: »

why do you need to decide by June?
why will the historic increase in inflation make any difference to you?

OP is looking at the Retail Prices Index figures. If he invests in May his start figure will be 220.7. If he waits until June his start figure will be 222.8. By investing in May he thus builds in the 0.95% monthly increase into his final return.

lisyloo

Yes that's correct.
The month in which you invest affects the starting figure.
So starting on 1st June is different to 31st May.

alanq

By mid-July it is possible that the current issue of Index-Linked Savings Certificates may be withdrawn / replaced by one with a less attractive fixed interest element.

RayWolfe

Jonbvn wrote: »

In such circumstances, I usually hedge my bets and put half the money in NS&I and leave the rest where it is.

This is a very sensible suggestion.
OP, you do not know what the July/August/September RPI will be. What if it is higher than May? You can't get these decisions right all the time, so some and some makes great sense. For what it's worth, I do some every month, then at every expiry I have the option to get out or continue - continue that is - with total flexibility; no penalties should I need the money or just think its no longer worthwhile.

dorsetlass

Sorry if this is the wrong place to ask this question, as I'm clearly not helping OP.

I have 3 yr NS&I Cert maturing this June. I haven't yet had the letter from NS&I letting me know what I can do, but I believe I can leave it there at the latest % for another 3 year term.

I don't need the cash at the moment, and have enough other savings for the moment.

I'm tempted to keep the money in - but how does one know when 'its no longer worthwhile' (sorry RayWolfe - forgot to copy your sentence into mine!).
Thanks

Sceptic001

dorsetlass wrote: »

Sorry if this is the wrong place to ask this question, as I'm clearly not helping OP.

I have 3 yr NS&I Cert maturing this June. I haven't yet had the letter from NS&I letting me know what I can do, but I believe I can leave it there at the latest % for another 3 year term.

I don't need the cash at the moment, and have enough other savings for the moment.

I'm tempted to keep the money in - but how does one know when 'its no longer worthwhile' (sorry RayWolfe - forgot to copy your sentence into mine!).
Thanks

The advantage of re-invested certificates is that you don't have to wait a year before the index-linking and bonus are applied. There is a brief window between the publication of the RPI figure mid-month and the monthly revaluation of your certificate (on the maturity day) in which you can decide whether to cash in.

RayWolfe

dorsetlass wrote: »

I have 3 yr NS&I Cert maturing this June. I haven't yet had the letter from NS&I letting me know what I can do, but I believe I can leave it there at the latest % for another 3 year term.

I don't need the cash at the moment, and have enough other savings for the moment.

Yes, you can leave it for a further period if you wish. As Sceptic says, you can then cash it in at ANY time without penalty AND can "play" the inflation rate.
Although, this is not advice, it would seem that in your circumstances and with current rates it would be best to leave it for now - instant access and probably a good return.

Jonbvn

RayWolfe wrote: »

For what it's worth, I do some every month, then at every expiry I have the option to get out or continue - continue that is - with total flexibility; no penalties should I need the money or just think its no longer worthwhile.

This is similar to a "bond ladder" and IMPO a very good idea. Almost the flexibility of instant access, together with index linking.

Only downside I can see is that you will end up doing a lot of adminstration.