www.InvestmentGuide.co.uk
www.InvestmentGuide.co.ukPast Issues of Index Linked
Certificates
Other National
Savings
NATIONAL SAVINGS
(Once known as Grannybonds)
A way of linking your investment to the Retail Prices
Index. On top you get a fixed interest rate which is lower if you stop early.
Interest, once added, is index-linked too.
If you have past issues,
you should check the interest rate as this can be as little as the rise in
retail prices alone (about 4.3% a year in May 2008) or as high as 2.75% plus
the rise in retail prices. For details of past issues, interest rates and
current values click here.
Who can invest Anyone.
How worthwhile Well worth considering especially for higher rate taxpayers, who may want to always invest the maximum in every issue. However the current issues have had a very significant drop in the interest rate, very slightly raised again with the current issues, although index linking is still high because the Retail Prices Index is high. Poor value for non-taxpayers. Basic taxpayers should compare with Stock Government Index-Linked. For other types of index linked investments, see Bonds and stock.
Minimum £100.
Maximum £15,000 for each issue but you can also re-invest any other fixed or index linked issues of savings certificates you hold when they reach their original maturity date after 2, 3 or 5 years. You may hold more if you inherit them. Single maximum applies to joint holdings. Certificates may also be held in trust, thus doubling the maximum investment. You need a special trustee application the first time you invest as a trustees. You may buy these in addition to other issues of National Savings Certificates.
Suitable Lump sums. Regular savings.
Money back About 2 weeks. Ask for a repayment form and post-paid envelope at a post office. Any number of units may be cashed. During the first year: your original investment returned. After 1st year (and in 1st year if 're-investment certificates'): index-linking and interest added but you get less interest if you cash early. At the end of the 3 or 5 year term you will be asked whether you want to cash or re-invest ; if you do nothing your proceeds are automatically re-invested in the current issue of the same term you originally had.
Interest Variable with a minimum guaranteed rate. For the current and year by year interest rates, the rate on past issues, the most recent actual maturity values and the current rate of inflation click here.
Interest paid When certificates cashed.
Tax All increases in the value of the certificates are tax-free. Nothing has to be declared on a tax return. The same tax exemptions apply to National Savings Fixed Interest Certificates. Useful as a means of holding money for adult children in an absolute trust as income is tax free and doesn't need to be returned on a tax return.
Fees to pay None.
Passbook None. You get a certificate. If you don't have a holder's number card, you will be given one. This covers all issues of savings certificates. The number should be quoted if you withdraw or buy more certificates. You should have a separate holder's card for a trust holding.
Children Convenient for gifts. Certificates in the name of a child under 7 can normally be cashed by a parent or guardian.
Risk None. Full value of original investment returned on withdrawal.
How to invest Get an application form. Pay over the counter at a post office or by post to National Savings.
Where from Get an application form on-line (including special trustee forms) or phone 0845 964 5000. Also from Post Offices for ordinary forms.
Past Issues of Index Linked
Certificates
Other National
Savings
Last updated 22
June 2008.