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MSE News: NS&I inflation-beating savings to return
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The ONS seems to show that current RPI is 5.3% - hence am I being daft in thinking that this product relates to 5.8% tax free?
http://www.statistics.gov.uk/cci/nugget.asp?id=190 -
Stochasticity wrote: »Or if inflation abates and you'd have been significantly better off in fixed rate savings.0
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Which is best - the 5-year Index-linked or 5-year Fixed Interest Savings Certificates?0
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veryintrigued wrote: »The ONS seems to show that current RPI is 5.3% - hence am I being daft in thinking that this product relates to 5.8% tax free?
http://www.statistics.gov.uk/cci/nugget.asp?id=19
Depends what inflation does over the next year, not what it is at the moment.0 -
Noggin_the_Tog wrote: »The media are all giving the impression that the new index linked investment is ALL of RPI + 0.5% ie 5% ++
WRONG!!
The return is the growth in RPI index from 2 months before the purchase date, to the index on the anniversary date.If the index drops, you get nothing (well only the + 0.5% bit)0 -
Depends what inflation does over the next year, not what it is at the moment.
Yes I know - but that wasnt the question I was asking - I was trying to ascertain what the current rate would be!
Edit - have re-read your response (and mine and Wrigglys and I now understand what you mean - I'll admit I didnt when i initially responded!!).
Many thanks0 -
veryintrigued wrote: »
Not daft, but the 5.8% is not useful if you are investing now. It is what you would have got if you had invested in May last year. (Actually, lucky investors got 6.3% as the certificates issued then were RPI + 1.0% - ignoring the annual increment complexity).
If you invest now, your interest rate is based on March 2011-March 2012 change in RPI. We don't know what that will be, but the current value is very high, so expectations are that it will start to fall slightly. The April RPI figures released soon are likely to show a big year-on-year percentage drop, because last April saw a big rise in the index value.
In about a week's time, I wouldn't be surprised to see people complaining that they got ripped off, expecting 5.8%, but RPI has fallen to 4.5% in one month.0 -
The key thing is that it is based on the index, and the change in the index, not the headline figure0
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As an investment for a year-and-a-day it's very hard to beat. As an investment for longer, it's probably going to be very hard to beat. The ability of some people to moan about anything and everything is impressive in its way.Free the dunston one next time too.0
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Noggin_the_Tog wrote: »The key thing is that it is based on the index, and the change in the index, not the headline figure
The only time they differ is when the headline rate being quoted is an estimate. For example taking the change in the index for 1 month and saying if it continued at that rate for a year the annual inflation rate would be X, which is not uncommon.0
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