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

smudger1964

I wonder if anyone can offer advice on investing a couple of thousand in these things.I want to apply by post have downloaded the application form and looked on the nsi website.I am not sure about the "money from your account thing".The cheque will be from a nationwide passbook in the form of a cheque made out to nsi.Is this not allowed? do I have to pay the cheque into my cheque account and wait for it to clear and then send a cheque from my personal account? im confused?? because it says on bottom of form for nsi what account number etc is cheque from??

noh

smudger1964 wrote: »

I wonder if anyone can offer advice on investing a couple of thousand in these things.I want to apply by post have downloaded the application form and looked on the nsi website.I am not sure about the "money from your account thing".The cheque will be from a nationwide passbook in the form of a cheque made out to nsi.Is this not allowed? do I have to pay the cheque into my cheque account and wait for it to clear and then send a cheque from my personal account? im confused?? because it says on bottom of form for nsi what account number etc is cheque from??

From the T+Cs

"31. When an application is made by post the Certificate must be purchased using a cheque drawn on a UK bank or building society account held by the proposed Certificate holder, or applicant where different, or by a building society branch cheque or banker’s draft."

So yes a counter cheque from the Nationwide is ok.

Murph890

Can anyone help me out on the NSI inflation beating offer please.

Commentators say that NSI will pay out RPI (currently 5.2) plus a % of interest averaging 0.5% over 5 years.

Yet NSI say they will pay out the change in RPI plus the interest and have a table on their website which is difficult to understand. Can anyone tell me what we'd get back on say a £1000 investment if inflation stays at 5.2 for example or goes to say 6.2%

Cheers - puzzled of Brentwood.

D

Stompa

Murph890 wrote: »

Commentators say that NSI will pay out RPI (currently 5.2) plus a % of interest averaging 0.5% over 5 years.

Yet NSI say they will pay out the change in RPI plus the interest and have a table on their website which is difficult to understand. Can anyone tell me what we'd get back on say a £1000 investment if inflation stays at 5.2 for example or goes to say 6.2%

If RPI were to remain at 5.2% throughout the 5 year period, then your £1000 would increase in value as follows:

Year 1 - 5.20% + 0.25% = 5.45% (£1054.50)
Year 2 - 5.20% + 0.35% = 5.55% (£1113.03)
Year 3 - 5.20% + 0.40% = 5.60% (£1175.35)
Year 4 - 5.20% + 0.65% = 5.85% (£1244.11)
Year 5 - 5.20% + 0.86% = 6.06% (£1319.51)

At the end of year 5 the amount of interest earned would be (roughly) the same as if the rate had been 5.20% + 0.50% = 5.70% every year.

Baldur

Murph890 wrote: »

Can anyone help me out on the NSI inflation beating offer please.

Commentators say that NSI will pay out RPI (currently 5.2) plus a % of interest averaging 0.5% over 5 years.

Yet NSI say they will pay out the change in RPI plus the interest and have a table on their website which is difficult to understand. Can anyone tell me what we'd get back on say a £1000 investment if inflation stays at 5.2 for example or goes to say 6.2%

As I read it, forget the current 5.2% inflation figure - you would earn the annual change in the RPI figure (starting at the figure applying 2 months prior to your purchase of the certificate) plus a percentage increase on each anniversary of purchase - this percentage varies over the 5 year period, averaging 0.5% over the full term.

If, on the fifth anniversary of your purchase, the percentage difference in the annual RPI changes averaged 3% (for example), you would expect to receive 3.5% tax free interest on maturity - if 5%, you would expect to receive 5.5% tax free or, if 0%, you would simply receive 0.5% tax free.

<Edit> Those are all approximate AER figures

Baldur

le_loup wrote: »

?4.50%
The interest part is PA.

You appear to have missed my edit?

Those are all approximate AER figures

le_loup

Sorry, My message deleted.

Penelope_Penguin

Good morning :beer: Does anyone know what documentation we get for these certificates, please? I applied on 25 May (and received an e-mail confirmation), the money left my account on 28 May, and I've heard nothing since.

TIA

Kered

Penelope_Penguin wrote: »

Good morning :beer: Does anyone know what documentation we get for these certificates, please? I applied on 25 May (and received an e-mail confirmation), the money left my account on 28 May, and I've heard nothing since.

TIA

I got a letter about a week after the money left my account asking for my signature only, returned same day in envelope provided

10_66

Penelope_Penguin wrote: »

Good morning :beer: Does anyone know what documentation we get for these certificates, please? I applied on 25 May (and received an e-mail confirmation), the money left my account on 28 May, and I've heard nothing since...

You'll get a letter asking for signature, and then 2 or 3 weeks' later you'll get the certificate.