NS&I certificates

lisyloo

Yes you can add more. Provided you are within the £15K limit (per issue) and it meets the minimum of £100.
If you already have a customer number then it's quite quick and easy.

[Deleted User]

lisyloo wrote: »

Yes you can add more. Provided you are within the £15K limit (per issue) and it meets the minimum of £100.
If you already have a customer number then it's quite quick and easy.

Can you withdraw part of a single deposit into an ILSC?

lisyloo

Yes you can withdraw part. It's on section 6 of the form where you specify how much you want to take out.
You may not get the exact amount you specify because the capital & interest has to tie up.
So for example if you want £10,500 and the interest on £10,000 capital was £498, then you'd get £10,498 and not £10,500, but I'm sure it's there or there abouts.

[Deleted User]

lisyloo wrote: »

Yes you can withdraw part. It's on section 6 of the form where you specify how much you want to take out.
You may not get the exact amount you specify because the capital & interest has to tie up.
So for example if you want £10,500 and the interest on £10,000 capital was £498, then you'd get £10,498 and not £10,500, but I'm sure it's there or there abouts.

Thank you

Are there any graphs people know of showing the returns you'd get on x if you saved it with an ILSC as compared with the best savings account for that time; with caveats of savy switching i.e. not chasing a small increment as you'd likely loose more interest waiting for money transfers.

I'm just trying to add a note to my diary suggesting what to look for in a years time and something like this would be helpful, albeit for trends.

Currently my note says (thanks for the contributions from this thread):

"Does RPI inflation look like it's falling or rising. Same question for general interest rates? If RPI is falling and interest rates rising see if there is a more profitable ISA or easy access savings account. Or consider having some cash protected against inflation regardless of the level of interest rates e.g. certificates may be withdrawn, RPI may rise sharply then you'd be unable to reinvest"

edinburgher

Yes you can add more. Provided you are within the £15K limit (per issue) and it meets the minimum of £100.

If you already have a customer number then it's quite quick and easy.

That's great to know lisyloo, thanks. I've got some savings that I'd like to invest in future (but not yet) and this certainly sounds attractive

masonic

Deleted_User wrote: »

Are there any graphs people know of showing the returns you'd get on x if you saved it with an ILSC as compared with the best savings account for that time; with caveats of savy switching i.e. not chasing a small increment as you'd likely loose more interest waiting for money transfers.

You could use the calculator on the NS&I webpage to work out the historic returns and compare them to historic BoE base rates (making the assumption that you could earn, for example, base rate+1% on average in the best savings account in the past). I'm not sure that such a comparison would be very helpful for future predictions though, because the current RPI rate gives you very little information about future the RPI rate. What has happened in the past won't necessarily be repeated in the future.

The only way I see of making a judgement about whether to go for ILSC or a savings account is to compare the predicted rate of inflation with current savings rates. Of course, predictions can be way off the mark, so you can't expect to correctly predict which is the best place for your money all of the time.

lisyloo

For RPI I look at concensus forecasts compiled by HM treasury.
It's not a crystal ball as no-one knows what will happen, but you have to use something to take a view.

Latest is 5.2 for 2011 and 3.4 for 2012.
http://www.hm-treasury.gov.uk/d/201107forecomp.pdf

I reckon that still beats savings accounts for the next 12 months, so I'm still putting spare cash into NSI.
I take a 12 month view because you are only tied in for 12 months (and not even that in an emergency).

[Deleted User]

lisyloo wrote: »

For RPI I look at concensus forecasts compiled by HM treasury.
It's not a crystal ball as no-one knows what will happen, but you have to use something to take a view.

Latest is 5.2 for 2011 and 3.4 for 2012.
http://www.hm-treasury.gov.uk/d/201107forecomp.pdf

I reckon that still beats savings accounts for the next 12 months, so I'm still putting spare cash into NSI.
I take a 12 month view because you are only tied in for 12 months (and not even that in an emergency).

Very helpful again!

Fortyfoot

My fixed rate mortgage with the Nationwide finishes at the end of September and will revert to the Base Mortgage Rate, which I think will be 2% above the BoE base rate, 2.5% if I am correct.

I have made overpayments which I can have back. I am considering asking for the over payments back and buying the 5 year NS&I fixed interest savings certificates which are tax free and as far as I can see tied in for only one year.

Is this a wise move?

Fortyfoot

lisyloo

2.5% if I am correct

Probably but's that a guess as it will depend on base rates.
I think rates are unlikely to go up by Sept but just pointing out it's not known.

Is this a wise move?

I'm stoozing my mortgage at 0.99% so in theory I'd say it's a great idea.

However you need to compare BOE +2% with RPI +0.25% over 12 months.
BOE will probably go up in that time and RPI will almost certainly go down (from VAT changes if nothing else).

My guess is that you would make a marginal profit (less than 1%), but there is some risk you could lose money.
No-one has a crystal ball so at the end of the day it's up to you.

But you certainly won't be making massive profits.
Remember you won't get the 5% RPI now, you will get RPI in 12 months which is forecast to be about 3.5%, and base rates may have gone up in a years time too.
Not sure I'd bother to be honest.