NS&I Index Linked Certificate Renewal

AnotherJoe wrote: »

If you dont have a better use for the money, renewing for 5 years is a no-brainer.

Reason being, as long as you time the withdrawal right, you dont lose out on RPI paid, and so you get the same benefits as if you'd signed up to 1,2,3 years without the risk that these will be withdrawn at next renewal, and losing out on a few years at RPI instead of CPI or some other figure.

I know this is an old thread, found it by googling the same issue.

My question is, is the above still valid? According to the NSI website, there's a withdrawal penalty of 90 days interest plus losing the index-linking on the whole certificate for the year. Is this a new thing since this thread started?

..for me it's still a no brainer to roll them on for another period while you still can...index linked / "safe" money. (Unless you need the cash for something else).

Davina40 wrote: »

According to the NSI website, there's a withdrawal penalty of 90 days interest plus losing the index-linking on the whole certificate for the year. Is this a new thing since this thread started?

It's new but not that new - it came in sometime between 2011 and 2016, because it wasn't there when I bought my first 5-year certs, and was there when I renewed them.

I think AnotherJoe's point is as Reed_Richards suggests - i.e. that you can cash in after X years (or perhaps X years + 1 day) with a penalty as close to zero as makes no difference.

Here are the relevant T&Cs. Para 19 defines that index-linking is credited on the anniversary of buying the cert. And para 61 defines the cashing-in penalty, referring back to para 19 for its definition of "the year in which an early encashment is made".

My interpretation of that is the same as AnotherJoe's. Cash in on the anniversary (or perhaps the day after) and you only lose the 90 days' interest, i.e. 0.0025% of the principal, i.e. 25p for every £10k that you hold.

ffacoffipawb wrote: »

I make it 25p not 40p.

Duh, of course. Thanks!

gatters wrote: »

Out of interest, what determines whether they allow renewals or not?

My guess it will be allowed until enough have been dropped that they can cope with the sudden outflow of funds.
Maybe they will play with the term for which they can be renewed first and start trying to encourage people to drop out.
Maybe move from RPI to CPI or try negative interest rates on top.

Another reason for going for 5 years.
I took out loads of them in smallish tranches which means I get lots of letters now and keep missing the ones that talk about renewals so still have some 3 years. Must look at the site and see what can be done some time.