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

ed123_2

...another thing with these accounts is that interest is compounded ie in 2nd/3rd/4th year rpi+fixed % for year is applied to sum at anniversary date (ie initial capital+ interest for year)

hillwalker2004

gadgetmind wrote: »

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.

Its £2bn of net financing for the year so in practice it will be a fair bit more, I've read it would be as much as £14bn. Using your 15k analysis that would be over 900k people. In practice it would be more than this as obviously not everybody would invest the full amount. However also bear in mind that the £14bn will relate to all NS&I products, not just the index certificates.

oldvicar

whu wrote: »

Trying to get through on the phone to them but constantly engaged!!!

IMO the NS&I call centre is superb and they must have anticipated a great deal of enquiries about the new issue. So if people have difficulty getting through on the phone then I surmise that demand must be truly overwhelming

oldvicar

I have read above that people are buying in to this issue but are splitting their application in to smaller amounts - e.g. someone wanting the max £15K said they would buy 3 lots of £5K.

From personal experience of doing a similar thing with earlier NS&I certificate issues I would say Be careful that your payment is not rejected by your bank's security systems as a suspected duplicate. I have had an experience of a 2nd payment for an identical amount being declined by my debit card issuer.

I would sugest that if for whatever reason you wish to split your purchases across separate certificates, then avoid buying identical amounts on the same day. For example buy £5K on 3 consecutive days, or if buying in quick succession on the same day try varying the amounts such as £4900, £5000 and £5100.

Someone above pointed out that Certificates can be partially encashed so technically there is no need to split purchases. But I fully understand why some people want to do this.

PS: mine were online purchases

sabrefitz

With these new NSI saving certificates, if I say open an account with £100 can I put more money in throughout the year up to the maximum of £15000?

Consumerist

sabrefitz wrote: »

With these new NSI saving certificates, if I say open an account with £100 can I put more money in throughout the year up to the maximum of £15000?

You just buy more certificates when you want to, up to £15k max in any one issue. Each certificate you buy will have its own RPI start value and maturity date.

paul30661

So essentially you are lending money to the Government not knowing what they are going to give you in return (sounds like tax if you put it like that!) as the interest rate isn't known until the end of the 1st year, 2nd year, etc. ?

But looking at the alternatives if you are (luckily?) a higher rate tax payer and you assume that the highest rate for a 1 year savings account is going to be 'x'% interest then provided (because of the tax free interest with these certificates) the change in inflation after 1 year is not less than 'x'% minus 40% minus 0.25% you should be no worse off ?

pocketstrings

hallo
I have read all of this, but some of it just going in unfortunately.

please could any of you give opinions on whether i would be wise to invest?
what i am looking for is:

1) tax-free
2) risk-free
3) make as much interest as possible or at least not lose money due to inflation
4) not have to worry about it too much unless i want to take money out or the five years is up

I can't really get my head around the whole RPI thing, despite trying.
:eek:

paul30661

1) tax-free -yes
2) risk-free - yes, provided the UK Gov't doesn't go belly up
3) make as much interest as possible or at least not lose money due to inflation - if you mean as much as possible subject to th above 2 criteria then yes, you probably wont do better in many other places at the moment
4) not have to worry about it too much unless i want to take money out or the five years is up - Yes

I can't really get my head around the whole RPI thing, despite trying. I think there has been a lot (too much) information on here about how it is calculated - and I'm not expert enough to clarify it in any simpler terms

JoeCrystal

RPI index-linked is like this:

You buy £100 this month. This is now based on March RPI
Let assume RPI Index in March 2011 is 100.

Next year in May, the RPI Index for March in 2012 is now 105.

This is worked out as 5% increase in RPI Index. Therefore your money will increase by 5%.