Is it time to ditch NSI Indexed Linked

pqrdef

ETROL wrote: »

I can also point to the fact that this month i earned just £18 on a £15000 certificate.

This is because raw monthly RPI figures are not seasonally adjusted. Prices actually tend to go down at certain times of year, typically harvest time and January (because of sales).

Of course they make up for it by rising faster than average at other times, because the harvest and the sales don't last for ever.

That's why £80 a month on £15000 is 6.4%, which is higher than the headline rate.

Wouldn't bother trying to profit out of seasonal variation though.

CLAPTON

NS&I certs work on the change of RPI from the date you bought them (well two month before) or it's annual equivalent; so the current rate of inflation is only loosely related to the value of the certs unless it's the anniversary month

oldvicar

twokcc wrote: »

Don't see how you arrive at 11months to late all my investments more than a year old so can cash in at any one month. Appreciate you could be gettind say5% plus 11 months into schem and if a massive (12month of deflation this could be reduced to additional element only with no inflation element.

What would you propose 'old vicar'?

Appreciate you can cash in at any time. The '11 months too late' is based on the fact that by the time the published RPI % return dips below that on an ordinary savings account, that is what you have already earned for the past year - ie you could have been better off withdrawing a year earlier and putting in into a regular account (unless of course these rates vary a lot year to year).

What I would propose with ILSCs is:

1) Buy as many as you can, whenever they are available
2) Keep them - at least for the full term, and probably forever unless you gt desperate
3) Sleep soundly

twokcc

oldvicar wrote: »

Appreciate you can cash in at any time. The '11 months too late' is based on the fact that by the time the published RPI % return dips below that on an ordinary savings account, that is what you have already earned for the past year - ie you could have been better off withdrawing a year earlier and putting in into a regular account (unless of course these rates vary a lot year to year).

What I would propose with ILSCs is:

1) Buy as many as you can, whenever they are available
2) Keep them - at least for the full term, and probably forever unless you gt desperate
3) Sleep soundly

Agree entirely, exactly what I've done.
Believe you can also cash in between the RPI announcement and the end of the month and still get the return based on previous months rpi cash in figure. i.e figure published on NS&I website is to cash in December so if a massive drop in one month can still get previous months return is you act quickly. Can't see this happening unless George Osborne decides to reduce Vat to 10% or Shell decides its going to sell diesel at a loss :rotfl:

Masomnia

twokcc wrote: »

Agree entirely, exactly what I've done.
Believe you can also cash in between the RPI announcement and the end of the month and still get the return based on previous months rpi cash in figure. i.e figure published on NS&I website is to cash in December so if a massive drop in one month can still get previous months return is you act quickly. Can't see this happening unless George Osborne decides to reduce Vat to 10% or Shell decides its going to sell diesel at a loss :rotfl:

Why not? RPI fell between June and July this year.