NS&I Index-linked Savings Certificates

Sapphire

Just wondered whether Martin provides info about these anywhere on this site - I've searched but couldn't find anything, so maybe I'm looking in the wrong place. :rolleyes:

I've heard that these may be a good savings/investment vehicle, but would like to find out more about them. The NS&I site doesn't provide very much info, and I'd like to find out more from an impartial source if possible.

Any advice would be appreciated. :T

StevieJ

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1098730527,15721,

He says you have to hold for at least three years, this is incorrect you can sell after 12 months and still earn a good rate of interest.

Sapphire

From what I've read about these accounts, you don't earn any interest from them if you withdraw the money up to a year after you have invested it.

StevieJ

That is corrrect, no interest is earned if you withdraw your cash in the first year.

shokadelika

StevieJ wrote: »

That is corrrect, no interest is earned if you withdraw your cash in the first year.

But you CAN cash these in after one full year ! only if you cash in before the 1st anniversary do you loose out.

Biggles

No, that's completely wrong!

You can still earn interest if you withdraw after 12 months.




I'll get me coat.......
;-)

IGK

All the discussion about when you can get your money out and how much interest you'll get at any given time is all very well, but in my opinion if you invest in one of these you should do so with the intention of keeping it until maturity.
It is clearly a very useful feature to be able to cash in early, but that feature shouldn't be used unless you either need the money for something else or decide you don't actually want to invest in these any more.

StevieJ

IGK wrote: »

All the discussion about when you can get your money out and how much interest you'll get at any given time is all very well, but in my opinion if you invest in one of these you should do so with the intention of keeping it until maturity.
It is clearly a very useful feature to be able to cash in early, but that feature shouldn't be used unless you either need the money for something else or decide you don't actually want to invest in these any more.

Why shouldn't it be used if it works out a good short term rate? These are ideal for someone who is a short term HR taxpayer ( eg in receipt of redundancy payments) who will be reverting to BR in the next tax year.

IGK

StevieJ wrote: »

Why shouldn't it be used if it works out a good short term rate? These are ideal for someone who is a short term HR taxpayer ( eg in receipt of redundancy payments) who will be reverting to BR in the next tax year.

It could be, and the example you give would be one such use (though I don't think they should be ignored by basic rate taxpayers). Another would be if you expect a larger short-term increase in the RPI, which would then tail off (but if you're that good at inflation forecasting then you should get a job at the Bank of England )

I just think there are greater benefits to be had by owning a portfolio of these certificates for as long as possible (5 years).
They may not always pay the best equivalent gross return (if RPI slows), but apart from index-linked Gilts (which are complicated, not tax-free and very risky), there is no alternative, completely safe way of protecting your hard-earned savings against inflation.
I wouldn't put all my money in them, but as a safety net they provide a way of being able to sleep at night. If only there was a 20 year issue!

smash

I invested in these back in January after receiving some redundancy. Can I now invest again as this is a new issue?

barak

smash wrote: »

I invested in these back in January after receiving some redundancy. Can I now invest again as this is a new issue?

Yes! You can invest the maximum in each new issue regardless of any previous holdings.