MSE News: NS&I inflation-beating savings to return

Doc_N

How difficult is it, really, for people to check out the National Savings website to get accurate information? Here's a link that might help:

http://www.nsandi.com/savings-index-linked-savings-certificates

Ader1

Doc_N wrote: »

How difficult is it, really, for people to check out the National Savings website to get accurate information? Here's a link that might help:

http://www.nsandi.com/savings-index-linked-savings-certificates

I asked a question earlier about whether the .5 interest is still payable even if we have deflation. It doesn't seem that easy to find the answer. Can you show me the paraparaph/sentence where it states the answer to this?

Ader1

OK....I think I just found it buried in there.....:

"We calculate the fixed interest separately at the rate that applies for that year, and add that to your investment too. You’ll always receive the fixed interest so your investment is guaranteed to grow in value year on year."

Ader1

So really this has got to be a no brainer....in deflation your investment will even grow and in an inflationary environment....you investment will keep abreast of RPI + .5!

Doc_N

Ader1 wrote: »

I asked a question earlier about whether the .5 interest is still payable even if we have deflation. It doesn't seem that easy to find the answer. Can you show me the paraparaph/sentence where it states the answer to this?

This might help you - contains the full T&C (and a phone number):

http://www.nsandi.com/files/asset/pdf/ilsc-brochure.pdf

lisyloo

So really this has got to be a no brainer

No I don't think it's a no brainer.
If inflation is low in future, you might be able to get a higher rate from a savings account.

I'm not saying that's likely, in fact I think NSI are a great deal that everyone should consider as part of their portfolio.
However I don't believe it's a no-brainer.
Inflation is expected to reduce in fact one memebr of the MPC has nailed his flag to the post and says he'll leave if his prediction is wrong.
A fixed or variable savings account MAY do better.
Of course people's circs vary and if you are a 40% tax payer or even 20% and you've used your ISAs then the tax-free nature has a bearing.
But technically I think it would be misleading to call it a no-brainer.

If it was we'd have fewer threads and questions !!

Masomnia

lisyloo wrote: »

No I don't think it's a no brainer.
If inflation is low in future, you might be able to get a higher rate from a savings account.

I'm not saying that's likely, in fact I think NSI are a great deal that everyone should consider as part of their portfolio.
However I don't believe it's a no-brainer.
Inflation is expected to reduce in fact one memebr of the MPC has nailed his flag to the post and says he'll leave if his prediction is wrong.
A fixed or variable savings account MAY do better.
Of course people's circs vary and if you are a 40% tax payer or even 20% and you've used your ISAs then the tax-free nature has a bearing.
But technically I think it would be misleading to call it a no-brainer.

If it was we'd have fewer threads and questions !!

Exactly my thinking on the subject

These are great as part of a portfolio, but I wouldn't put all my life savings in there.

Ader1

lisyloo wrote: »

No I don't think it's a no brainer.

Inflation is expected to reduce in fact one memebr of the MPC has nailed his flag to the post and says he'll leave if his prediction is wrong.
A fixed or variable savings account MAY do better.

Who's that then?

lisyloo

Adam Posen

http://www.thisismoney.co.uk/news/article.html?in_article_id=527815&in_page_id=2

Strictly speaking he said he wouldn't seek re-election.

Posen expects inflation to fall to 1.5% by the middle of next year

Sceptic001

Masomnia wrote: »

Exactly my thinking on the subject

These are great as part of a portfolio, but I wouldn't put all my life savings in there.

Actually, I would say that at the moment they are the best place for any savings you can tie up for a year or more. I can't see RPI inflation falling much below 3% by May 2012, which means they beat any one-year fix currently available (even better for taxpayers). And remember to review the prospects for inflation and savings rates twelve months from now.