MSE News: Inflation-beating savings return

Stochasticity

This index-linked product gives an identical return to the best paying 5 year fix (4.6%) if RPI averages 3.2% over the next 5 years.

If RPI averages less than 3.2, you'll end up better off with the 5 year fix.

If RPI averages more than 3.2, you'll end up better off with the index-linked.

MiserlyMartin

If house prices fall over the 5 years, which is looking very likely, then RPI will fall. In this case though, interest rates probably won't rise much over the 5 year term, so comparing this account with the normal variable rates it will probably still be ok. Though at worst case 7.5%/5 = 1.5%... not a fantastic return and locking up the money for 5 years is not a good thing should you need it in unforseen circumstances which crop up in these times.

This account is tempting but the all the above worries me

Milarky

Oct 19: This product has now been withdrawn

https://www.emoneyfacts.co.uk/news/news-search.aspx?newsarticleid=199662

MiserlyMartin

Oh well that didn't last long then. Decision made for me. I didn't want to lock up the money for 5 years anyway.