NS&I certificates

sleepless_saver

NS&I index linked savings certificates are back:j

le_loup

... but, only the five year jobbies and at RPI + 0.5% pa.

michaelsacker

But it looks like you can withdraw after a year without any penalty -

Can be cashed in early, but no index-linking or interest paid if cashed in during the first year.

It's looking like a tax free 5%-ish one-year savings account to me at the moment?

Unless I've missed something?

oli2

This looks better than any isa on offer almost too good to be true and you know what they say about things too good to be true! What's the catch?

michaelsacker

Exactly! That's what Im worried about before piling in.
The trouble is I dont want to hang around for much longer as these deals are always taken away very fast.

Arthurian

On the one hand, the Bank of England is telling us inflation looks set to rise, and growth diminish, yet at the same time the price of oil and wheat has dropped recently and healthy company results keep popping up. :huh: Whatever happens, a guarantee to beat inflation means you can't actually lose money.

Primrose

I'm trying to discover what the interest deal is if you withdraw after one year as the Terms & conditions on the NSI website arn't specific. Do you suffer any penalty at all or are you paid the promised interest rate up to the date of withdrawal?

lisyloo

Do you suffer any penalty at all or are you paid the promised interest rate up to the date of withdrawal?

No penalty.
You are paid full years and any full months but you will not get any interest on any remaining days after full months.

bigfreddiel

michaelsacker wrote: »

But it looks like you can withdraw after a year without any penalty -

Can be cashed in early, but no index-linking or interest paid if cashed in during the first year.

It's looking like a tax free 5%-ish one-year savings account to me at the moment?

Unless I've missed something?

Why just keep them for one-year?
Hang in there for the full five years because interest rates will still be 1/2% next year - it isn't moving

fj

lisyloo

Why just keep them for one-year?

There could be many reasons.
If you savings for something specific e.g. house deposit then the money could be required.

If you are stoozing against BOE rate then there may come a point (BOE rises and RPI drops) when it's not worthshile.

Car crash, new boiler, roof repairs etc. etc.
Redundancy.

wriggly

michaelsacker wrote: »

It's looking like a tax free 5%-ish one-year savings account to me at the moment?

Unless I've missed something?

Yes, the 5%-ish rate being quoted is based on the RPI from March 2010-March 2011 . This bond will pay the RPI for March 2011-March 2012. Used as a 1 year bond, it will pay you RPI+0.25%, which means it will definitely pay at least 0.25%, but will probably pay more. So it is very different to getting a fixed-rate bond.