nsandi tax-free certificate vs hi-interest savings? which is better?

isofa

The 1.35% is fixed for the entire current issue (plus the index linked RPI obviously), only when they release a new issue will it have a different rate.

If you are a non-tax payer you could beat it with some of the top rates around at the moment, and possibly at a basic rate tax level too, but you'd be unlikely to better it as a high-rate tax payer.

SussexResearcher

In the wake of the current volatility on the stock markets and a cut in the US interest rate today, the chances of further rates hikes in Britain has receded. The sharp reduction in inflation in July also boosts the possibility of there being no further rate rise in the next 2-3 months at least while the MPC monitors what happens to inflation next.

But were the interest rates to rise at the end of this year or later, when a new issue of index-linked savings certificates is announced by NS&I, the current top-up component of 1.35% would almost certainly be higher to stay competitive with other savings offers.

uk_steve

isofa wrote: »

The 1.35% is fixed for the entire current issue (plus the index linked RPI obviously), only when they release a new issue will it have a different rate.

If you are a non-tax payer you could beat it with some of the top rates around at the moment, and possibly at a basic rate tax level too, but you'd be unlikely to better it as a high-rate tax payer.

is there anything else out there for none tax payers?

i have the following


(1) saving account which earns nr the top level of intrest which i can have tax free a year

(2) cash isa (tax free)

(3) own my home no mortgage

(4) premium bounds (tax free) (i know this is rubbish unless you win the big ones)

(5) just about to do stocks and shares isa (tax free)


i was about to park up some money in these ns and i as well *can do up to 60k* (tax free)


reason i am asking say for example


30k pre bonds
60k ns and i savings
7k all isa's in this year
80k in saving accounts earning intrest (earning below the tax free limit)


comes to rougthly 175k am i better of by coming a tax payer and investing the whole in another route

chris1

isofa wrote: »

It's index-linked, so it will change when the RPI rate changes...

...I don't know if they make the change immediately when RPI changes, but I assume it's almost immediate otherwise it wouldn't be allowed to carry the index-linked status.

I don't think this is how it works - don't you get the inflation rate as a snapshot at the end of each complete year?

For example if you bought today, if inflation today is 4.8%, 10% in 6 months time and 1% in a year's time, you would get 1%...

Is that right?

mr113

I believe the rates are altered monthly. The last date they were measured was 16/09/08. I suggest using the calculator tool here (http://www.nsandi.com/products/ilsc/calculator.jsp), and setting up a fictional certificate. For example, yesterday I looked at what £100 in a 3 year term would have earned in the six calendar months between 16/3/08 and 19/09/08.

In six months it would have earned a huge £4.17. A five year bond would have earned £4.08.

Whilst this is no indication of future performance, it helps you to grasp how these certificates work.

What you do depends on your personal circumstances (for example the benefits for a HR taxpayer are greater than the benefits for the average BR taxpayer, whether you may need access to the funds and what you forecast your circumstances to be in five years).

One thing you may wish to consider is whether to invest in a 3 year ILSC, and then review the situation (as there is no limit on reinvesting matured certificates), by which time there may be a one or two year issue available for you to complete the five years.

colin_the_truth

Has anybody had any luck actually obtaining this product. My P.O. said people had queued over 30 mins to be told we have no forms or know much about the product but told only to go online.
Even though it say by phone or post on the literature, I cannot find any contact online to obtain a postal application form. The usual governmental farce!

Stompa

colin_the_truth wrote: »

Even though it say by phone or post on the literature, I cannot find any contact online to obtain a postal application form. The usual governmental farce!

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

Masomnia

http://www.nsandi.com/savings-index-linked-savings-certificates?ccd=NQZAAE

Enjoy!

adindas

If you read this forum on another thread, you will notice a lot of people have got it.

Apply online using Debit card is the easiest way to do it.

ADINDAs

colin_the_truth wrote: »

Has anybody had any luck actually obtaining this product. My P.O. said people had queued over 30 mins to be told we have no forms or know much about the product but told only to go online.
Even though it say by phone or post on the literature, I cannot find any contact online to obtain a postal application form. The usual governmental farce!