NS&I certificates

lisyloo

Anyone notice that the index fell over the last month?

Yes, I use the calc each month so I did notice it.
First I thought the calc was broken and then realised that this could happen.

nrsql

masonic wrote: »

It's interesting that a fall in July's RPI figure is very common. I wonder what it is that causes this. There is normally also a fall in January, which perhaps can be explained by January sales affecting the price of some of the goods making up the index?

Summer sales.

bloss0m

Is it worth going for these

I sadly got some inheritance the other day from my dear mum. I have two isa's (3.01%) one for me and one for oh which I will put some money in to make this years quota but I still have around 10k to invest. I dont mind locking money in for a few years but I am confused about these certificates and can I add to it and or the interest rate it says rpi + 0.5 I think

At the moment the inheritance is waiting to clear in bank but tomorrow I can withdrawal.

I want to use this money to pay off mortgage in possible 5 years with the inheritance and my other savings maybe more and have a little left perhaps. I dont have a huge mortgage now but I am on a rate which may go up currently pay 2.4%.

I feel guilty in some respect of having money which I didnt earn, I know it sounds daft but my mum did without things and I want to not be silly with the money and blow it

I seen C&G rates for being quite attracted but obviously will pay tax on any interest, I dont have a huge income anyway

http://www.cheltglos.co.uk/savings/fixed-rates/index.html

gadgetmind

bloss0m wrote: »

I feel guilty in some respect of having money which I didnt earn,

I sort of know what you mean, but do you think that has ever bothered your average banker or MP?

If you really can leave this money untouched for 5 years, then these index linked certificates sound great. They will preserve the value of your cash as inflation and low interest rates reduces the size of your mortage.

ses6jwg

According to the NS&I Calc, the £3500 3-year RPI+1% certs I bought on 23rd January 2010 are now worth £3846.85

Quite pleased with that.

lisyloo

I dont mind locking money in for a few years but I am confused about these certificates and can I add to it and or the interest rate it says rpi + 0.5 I think

Your questions are a bit confusing, but yes you can add to it.
Providing you don't go over the £15K per issue per person and the min is £100 then you can add when you like (each contribution will have a different end date 5 year hence).
You are not tied in at all, but you won't get any interest if you withdraw before 12 months.

bloss0m

Sorry it was late and tired


I just want to make most of this windfall and feel obligated to spend it wisely as she would

The interest part confuses me a little, I know about the 1st year no interest if you take the money before hand

lisyloo wrote: »

[QUUOTE]I dont mind locking money in for a few years but I am confused about these certificates and can I add to it and or the interest rate it says rpi + 0.5 I think

Your questions are a bit confusing, but yes you can add to it.
Providing you don't go over the £15K per issue per person and the min is £100 then you can add when you like (each contribution will have a different end date 5 year hence).
You are not tied in at all, but you won't get any interest if you withdraw before 12 months.[/QUOTE]

bloss0m

Thanks so that doesn't sound too bad and of course no tax

I have over 10k to sue tomorrow I am not sure how I can fund the certificate as its a lot of cash, can I do some sort of transfer from my account to it at no cost

ses6jwg wrote: »

According to the NS&I Calc, the £3500 3-year RPI+1% certs I bought on 23rd January 2010 are now worth £3846.85

Quite pleased with that.

lisyloo

The interest part confuses me a little

Future RPI (retail price inflation) is unknown, but you are guaranteed to get this inflation plus a bit extra, so your money is guaranteed to go up in real terms.
It is not guaranteed to offer more than savings accounts (but if you saw RPI going down you withdraw albeit you have to consider the income tax considerations).
They are very safe and tax free.

The AER (annul equivalent) is RPI +0.5% over 5 years.

In actual fact it's this:

5-year Index-linked Savings Certificates

48th Issue
Purchase price + index-linking for year 1+ 0.25% of purchase price
= 1st anniversary value

1st anniversary value + index-linking for year 2 + 0.35% of 1st anniversary value
= 2nd anniversary value

2nd anniversary value + index-linking for year 3 + 0.40% of 2nd anniversary value
= 3rd anniversary value

3rd anniversary value + index-linking for year 4 + 0.65% of 3rd anniversary value
= 4th anniversary value

4th anniversary value + index-linking for year 5 + 0.86% of 4th anniversary value
= maturity value

So the extra bit goes up over time (this isn't really significant TBH.

Bear in mind that if your cash ISAs are full then you will need to pay income tax elsewhere.
I think they would be a good place for your money, but just keep reviewing it every now and then.
If RPI goes down, it may be in your interests in the future to withdraw and pay off your mortgage or it might be in your interests to use a bank account eslewhere. Just remember to take into account the income tax factor outside of NSI and ISAs.

lisyloo

can I do some sort of transfer from my account to it at no cost

I normally pay by debit card.