NS&I 5 year index linked saving certs 2011 issue - half way point!

10_66

I have 5 year ILSC maturing mid May. From posts on this thread I see that most of the profit earned on this certificate was earned in the first 3 years. I don’t understand the complexities of the ILSC, so can’t work out if, supposing over the next 3 to 5 years the certificates continued to perform at its current rate, what that rate would be.


I have the various bank “savings” accounts, and so I'm trying to calculate what the ILSC rate would be (if continued at current level) so I can try to decide whether to renew or put in an ISA.

polymaff

10_66 wrote: »

I have 5 year ILSC maturing mid May. From posts on this thread I see that most of the profit earned on this certificate was earned in the first 3 years. I don’t understand the complexities of the ILSC, so can’t work out if, supposing over the next 3 to 5 years the certificates continued to perform at its current rate, what that rate would be.


I have the various bank “savings” accounts, and so I'm trying to calculate what the ILSC rate would be (if continued at current level) so I can try to decide whether to renew or put in an ISA.

1.61% -- worth 2.01% to a basic rate taxpayer, 2.68% to a higher rate taxpayer

10_66

polymaff wrote: »

1.61% -- worth 2.01% to a basic rate taxpayer, 2.68% to a higher rate taxpayer

Thank you polymaff. With the terms for withdrawal (90 days loss of interest), would that be calculated on just the 0.01% attached interest (therefore negligible)? The rest of penalty being loss of that year's index linking (I understand if withdrawing the optimum time would be just after an anniversary)?

DawlishDilbert

onomatopoeia99 wrote: »

Worked it out as just over 2.75% p.a. interest over the term (tax free, obviously), if my use of logarithms to back calculate the compound interest rate was correct.

That's what I made it too, but I wasn't sure - good to get an agreement!

veryintrigued

DawlishDilbert wrote: »

That's what I made it too, but I wasn't sure - good to get an agreement!

Bump......

whattochoose

I took out my bonds on 14th May 2011. Renewal letter dated 8th April 2016 giving an estimated value of £17,191.60, based on RPI published March 2016.
I sent form off last Monday, having decided to cash in all of my bonds.
I rang them this morning to confirm they had received the form. This they confirmed, and told me funds will be credited to my nominated bank account on 16th May, which is a Monday.
Thus ends my one and only foray into National Savings.

polymaff

DawlishDilbert wrote: »

That's what I made it too, but I wasn't sure - good to get an agreement!

.. what's so good about agreeing the wrong figure?

polymaff

whattochoose wrote: »

I took out my bonds on 14th May 2011. Renewal letter dated 8th April 2016 giving an estimated value of £17,191.60, based on RPI published March 2016.
I sent form off last Monday, having decided to cash in all of my bonds.
I rang them this morning to confirm they had received the form. This they confirmed, and told me funds will be credited to my nominated bank account on 16th May, which is a Monday.
Thus ends my one and only foray into National Savings.

At least you'll end up with somewhat more than that £17,191.60

http://forums.moneysavingexpert.com/showpost.php?p=70489685&postcount=277

whattochoose

polymaff wrote: »

At least you'll end up with somewhat more than that £17,191.60

http://forums.moneysavingexpert.com/showpost.php?p=70489685&postcount=277

Indeed polymaff. Thank you.

Mr_K

I think it depends on what you think RPI is going to do over the next 5 years, not what it's doing at the moment. Nobody really can say, except that your savings will be protected from inflation. According to this forecast the only way is up, with rates forecast to go over 3% by 2017, these might be very valuable then. Minded to roll mine over for another term; the penalty for early withdrawal isn't that great if you time it right.