Index Linked Savings Certificates - Good Time to reinvest ?

darren72

I have some NS&I Index Link Savings Certificates that are due to mature shortly.

With the low interest rate is now a good time to re-invest ?

I was planning on cashing them out but not so sure now.

The renewal terms are 0.01% AER plus index linking.

Thanks

badger09

I think it depends what you would do with the money if you cashed them in. What rate would/could you earn on them?

For what its worth, I rolled mine over in May as I didn't have a more lucrative home for the cash and I'm already moving big chunks from cash ISA to S&S ISA so don't want to plough even more into S&S:o.

But your situation might be very different to mine.

Pincher

When you vacillate, do both.

Rollover half the money.

kidmugsy

We've rolled ours over. What they offer (inflation-protection) is attractive to us, they're irreplaceable, and there's effectively no competition.

If we change our minds we can reverse the decision at negligible cost shortly after the first anniversary of the new certificates.

AnotherJoe

Roll them over, for the full five years*, especially if you have other cash in higher rate savings accounts already.

Forget the miserable non-interest rate they pay, that's an irrelevance.
They are going to return you RPI,with no tax to pay, and inflation is only going one way over the next 1-2 years and probably several years beyond that and RPI is likely the most 'generous' measure of that.

Good article on this here

This is all in the context of where to put the money and keep it as cash. If you were considering investing in the stock market instead, that's a very different conversation with lots of options.

* there's no point whatsoever in doing it for 3 instead of 5. Gains you nothing and if they decide to stop roll overs in future, then you'll lose out on 2 years of RPI-level returns.