NS&I saver question

catfish50

SallyG wrote: »

I suppose there's a really good reason why we can't invest in this online by opening an account ?

You don't have to open an account. I just applied online, having found that the ISA I transferred on Tuesday as turned up in my current account today. The form asks you if you already have certificates, but it's not a problem if you don't. You need to have your debit card and have the money in the account you're transferring from.

http://www.nsandi.com/savings-index-linked-savings-certificates

lisyloo

I suppose there's a really good reason why we can't invest in this online by opening an account ?

You certainnly can apply online.
Although if you don't currently have an account then the signature part will have to be done through the post with paper and pen.
Is that a huge hardship to do once?
Personally I don't think so.

Remember they also backdate, so you re not suffering any delays.

SallyG

Thanks for responses - sorry I wasn't very clear - my grasp of all this money stuff is weak.
I meant it seemed odd being able to apply online but then having to use a debit card to pay rather than the way I did my ISA by ?electronic transfer - ie I got an account number for an ISA outside my own bank and told my bank to transfer the money into it.
That seems to avoid all doubt/trepidation?
Don't know enough to understand why that wasn't possible for NS&I.

catfish50

I don't understand the reason for your doubt/trepidation? If you had to wait until you had opened an account with NS&I you'd wait a long time at the moment, with such a rush on. Doing it this way, you can apply today and start earning interest from today.

Financial_Adviser

I thought I'd post this as I've only read of one comment on this forum from someone who actually understands how these certs work. I can just see in about 12 months time these certs hitting the headlines as having been 'mis-sold' as all I hear about them from 'money experts' is that you will get RPI + an interest bonus, although the NS&I t&c's clearly state this: I quote:

"we calculate the index-linking by using the RPI figures that apply to your Certificate at the start and end of each year of investment...If the index-linking is positive -ie if the RPI end level is higher than the RPI start level - then we add it to your investment. If the index-linking is negative...you won't receive any index-linking"

RPI is current 5.2%. The above means that should RPI be anything below this figure you only get the 0.25% 'bonus' after 1 yr and a day - how many of you are going to be happy to receive that after one year's investing????! You WILL NOT get 5.2% after yr 1 - it only measures inflationary increases from this point and any increases here-on in. Even economists predict inflation to decrease slightly by this time next year, no-one is expecting it to be higher than present. It's very unlikely inflation will be above 5.2% in exactly 10 months time (the RPI start level is taken 2 months before the date of investment). Remember - it doesn't look at the monthly change, just the start and end investment date.

So these certs are a huge gamble - why do you think NS&I have decided to launch these now? You would be investing at the top of the inflation point - why did NS&I withdraw from the market 10 months ago and not bring these out then?? The liklihood is that there will be no (except for the 0.25% in yr one, 0.35% yr 2 etc bonus) growth - I certainly would not be using these for a one year savings plan, you're more likely to get growth in a couple of years when inflation stabilises but then may possibly rise again - however, you would be forfeiting growth in the meantime for this on the earlier years of the plan.

I'm a financial adviser and it took me a while to understand this after reading and re-reading the documentation. And if it took me that long (after all the positive 'spin' there has been on these certs in the press) then god knows how long it will take someone who does not work with jargon and finance to understand it!

Hope this has helped, I would not be rushing out to get these.

Sceptic001

Please please please disregard Financial Adviser's post (above). He/she has got it completely wrong.

This is dealt with at length in this thread, starting at post #8

catfish50

Financial_Adviser wrote: »

why do you think NS&I have decided to launch these now? You would be investing at the top of the inflation point - why did NS&I withdraw from the market 10 months ago and not bring these out then??

"The inflation-proofed bonds were withdrawn from sale in July 2010 because of excessive demand, but the government said the chancellor's decision at the 2011 budget to increase the net financing target by £2bn for NS&I has allowed NS&I to re-introduce the savings certificates.

"The government's policy is to encourage saving in the medium and long term. The chancellor wants to reward savers and this move does that," said a government spokesman."
http://www.guardian.co.uk/money/2011/may/12/nsi-index-linked-saving-bonds

I'm a financial adviser and it took me a while to understand this after reading and re-reading the documentation. And if it took me that long (after all the positive 'spin' there has been on these certs in the press) then god knows how long it will take someone who does not work with jargon and finance to understand it!

It seems quite straightforward to me. No offence intended

noh

Financial_Adviser wrote: »

..............................................
I'm a financial adviser and it took me a while to understand this after reading and re-reading the documentation. And if it took me that long (after all the positive 'spin' there has been on these certs in the press) then god knows how long it will take someone who does not work with jargon and finance to understand it!

Hope this has helped, I would not be rushing out to get these.

You have completely failed to understand the terms of the offer which are relatively straightfoward.

I'm glad I am not one of your clients.

alanq

Financial_Adviser wrote: »

RPI is current 5.2%. The above means that should RPI be anything below this figure you only get the 0.25% 'bonus' after 1 yr and a day - how many of you are going to be happy to receive that after one year's investing????! ...

I'm a financial adviser and it took me a while to understand this after reading and re-reading the documentation. And if it took me that long (after all the positive 'spin' there has been on these certs in the press) then god knows how long it will take someone who does not work with jargon and finance to understand it!

But you have not understood it. RPI is a number not a percentage. 5.2% is the percentage CHANGE in the RPI over the past year. If you are a financial advisor and cannot follow that then I am glad that I am not one of your clients.

Update: I see that noh and I are of the same opinion.

lisyloo

Don't know enough to understand why that wasn't possible for NS&I.

Sorry I don't know why you cannot do a BACS transfer.

I would guess it's because a debit card payment is a "pull" i.e. they take your money and hence they can check whether you qualify first.
A BACS transfer is a "push" from your end.
The problem with this is that NSI can't do any checking so some people might go over their limits or not be eligible.
So I guess they'd have to put lots of checking in place, whereas at the moment they can check before they take your money.
I'm just guessing though.