NS&I certs maturing

guitarman001

Just got the letter, not got long to think about it. Basically can chuck them away for another 3 years but it's something like RPI (or is it now CPI?) + 0.2% or something.... I don't even know what the current rate is, I'm totally out of touch.

Basically.. has anybody gone ahead and renewed theirs - worth it? Put £11k in 3 years ago now worth £12.67k or so, wouldn't know what to do with it if it weren't in there!

Thanks!!!

redbuzzard

The real rate of interest isn't much, but better than the negative rates on offer elsewhere. But the real value isn't in the interest margin, it's in the RPI guarantee.

If it's money that you don't need in the near future, and you don't want to risk capital, you might as well book it, Danno?

Ifts

guitarman001 wrote: »

Basically.. has anybody gone ahead and renewed theirs - worth it?

Few peeps in this thread today renewed theirs: https://forums.moneysavingexpert.com/discussion/4624239

bowlhead99

guitarman001 wrote: »

I don't even know what the current rate is, I'm totally out of touch.

It doesn't really matter what the current rate is. If you're putting it away to spend later, the ability to guarantee to protect your capital against inflation without risking any of it is valuable. All other methods (shares, investment funds, property etc) have a risk to capital.

Neither the government (through NS&I) nor any bank on the high street is offering this to new customers.

The only reason not to do it is if you know or expect you'll need the cash in the time before it matures. As there will be a penalty in lost interest depending when you need to cash in.

Stubod

We have a few of these that have "matured" recently, and we have rolled them all over. I guess it depends on whether you the need the money now or not. If "not", and you at least want your money to maintain its value with inflation, and you want pretty much 100% security, then there probably isn't anywere better at the mo...

guitarman001

Yeah, stuff it. I'm just going to leave the money in there for 3 more years (not keen taking it to 5). The 0.2/0.25% or whatever it was is very poor compared to the original RPI + 1% but what can you do.

Need to start looking at alternative savings vehicles NOW as all my Lloyds Vantage accounts are full up.

murphydavid

Without a crystal ball or time machine one just has to guess but the Bank of England's 0.5% seems to be well entrenched and (without going to the considerable bother of getting involved in a new current account with Santander) today's best fixed 3year rate is 2.51% before tax (that's 2.1% after standard rate tax. The most recent RPI (2.9%) + another 0.2% comes to 3.1% with no tax to pay.
So if (and its a big if) the trend continues there is a 1% advantage to going on with NS&I.
If you maxed out your initial investment then You have £15000 in there which gives you an added £150 interest per year.
On the other hand if you go for it and the interest rates jump but the RPI does not, you are stuck because there is an enormous penalty to get at your cash within the 3 years.

kidmugsy

murphydavid wrote: »

there is an enormous penalty to get at your cash within the 3 years.

Not if you withdraw ALL the money very soon after the end of the first or second anniversary year.