MSE News: NS&I revives inflation-beating savings certificates

dtsazza

whu wrote: »

Thanks that's helpful:)

So if RPI was 5% when I took it out and 5.2% at the first anniversary what would I get ?

whu - you seem to be confusing the Retail Prices Index itself, with RPI inflation figures. Have a(nother) read of rollinghome's post on this page that covers it.

In a nutshell, RPI is basically just a number such as 189.3. The 5.3% figure that's often quoted as the current value of "RPI" actually refers to the fact that the RPI value for March 2011 is 5.3% higher than the RPI value for March 2010.

In light of this, the "current RPI" of 5% is irrelevant to these bonds. If RPI inflation was 5.2% at the first anniversary date, that means that the index value is 5.2% higher then than it was at the start date; and so you'd get a total return of 5.2% for the index portion and 0.25% for the first-year interest portion = 5.45%.

But of course we don't know what the change in RPI over the next year will be, yet.

Also is it penalty free if you withdraw your money after the first year as in previous years and can you partially withdraw your money?

It is kind of penalty free, in that you don't pay anything extra. Note however that while the issue is described as RPI + 0.5%, the interest portion is lower in earlier years, so if you withdraw after one year you'll actually get RPI + 0.25%, which you could consider to be an "early withdrawal penalty" of 0.25% of the capital (though it's not structured like this, it is equivalent).

whu

Thanks you two:cool:

I get it now I think:oThe percentage ie 5% etc is just the increase from the previous year eg from say 200.1 to 210.1 from March 2010 to March 2011

So say it was 200.1 in March 2010 and 190.1 in March 2011 I would only get the interest portion for that year - is that correct?

KTF

Yes, you would only get the interest part, not the RPI as it is lower than when you bought it.

whu

KTF wrote: »

Yes, you would only get the interest part, not the RPI as it is lower than when you bought it.

thanks - so if the following year it went up from 190.1 to 200.1 I would get RPI plus interest - thanks everyone for your help:)

KTF

You would get the difference between 190.1 and 200.1 in % added to your account plus the interest part.

acc

I applied yesterday, and gave my current account details for National Savings to take the funds directly.

Does anyone know when they take the funds, as I need to transfer the required amount to my current account? Also, what do they mean by 'date of investment'?

They confirmed the application by email, but the email was rather vague:

This is to confirm that we received your application on the date shown above - subject to your application being accepted, this will be your date of investment.

Please keep a note of the details above and quote them if you have any queries before your welcome letter arrives.

What happens next -

We may send you a confirmation form for you to sign and return. We may also ask for proof of your identity and address. If so, we need to receive the signed form and any proof of identity and address we ask for before we can accept your application. Our letter will tell you how long you have to reply, but please try to get back to us as soon as you can.

KTF

The funds are taken (or ringfenced in your account) immediately if you paid by debit card.

If you haven't already done so then I suggest you transfer the money into your current account asap.

Date of investment is the date you opened the account.

acc

KTF wrote: »

The funds are taken (or ringfenced in your account) immediately if you paid by debit card.

If you haven't already done so then I suggest you transfer the money into your current account asap.

Date of investment is the date you opened the account.

Thanks KTF.

The application webpages did say that the funds must be available, so I funded my current account yesterday.

I then received their email, which seems to suggest that they need to do some id checks, and then send me a form to sign, and I thought maybe they would only take the funds after they received that back, which could take a couple of weeks.

£15000 at a net 2.4% would cost £1 a day if sitting in a zero interest current account!

gadgetmind

I did 3x of these today, which was rainy day money for us and university fee money for daughter. Nothing was in quite the right place, so all done by post. Fingers crossed as 2bn only covers £15k for 133,000 people, and there are *loads* more people than this trying to prevent their cash buffer getting eaten by QE.

Consumerist

I see in an article from the Yorkshire Post that the banks and building societies don't like this new issue one little bit!

They have some competition at last. :beer: