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. This product
is not currently on sale.
If you have past issues, you should
check the interest rate as this can be as little 0.25% a year plus the rise in
the Retail Prices Index (negative in the 12 months to April - October 2009 but
plus 5.4% in the 12 months to October 2011) plus a fixed rise of from 0.25% a
year to 1.35% a year depending on which issue you hold. The certificates will
not fall below the value you paid initially (or if higher the value 12 months
earlier) . For details of past issues, interest rates and current values
click here.
Who can invest Anyone.
How worthwhile These have offered exceptional value in 2011,
especially for higher rate taxpayers, who may want to always invest the maximum
in every issue. Unfortunately after just a few months,
they had beecome so popular that they were withdrawn from sale again. However
you can register with National Savings to be informed when a new issue becomes
available by
clicking this link.
In the long term inflation,
as measured by the Retail Prices Index, may be greatly reduced but that could
be a temporary phase, see this
New York Times article which is equally applicable to the UK.
Basic taxpayers should compare with Stock Government
Index-Linked. For other types of index linked investments, see
Bonds and stock. These certificates are a must
for the risk averse.
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 4 working days if the money is paid direct to your bank account. For a repayment form see the National Savings web site. 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. The certificates never fall below what you have initially invested or the previous anniversary value (ie the value one, two, three, four or five years after you bought it) . So holders of existing certificates have little need to panic if the predictions of journalists and investment bankers that the Retail Prices Index may fall by up to 5% shortly come true - the most they will lose is one year's return.
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 which are less good value. 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 investOn-line. By phone. By post.
Where from Get an ordinary application form or a special trustee form online from National Savings once the certificates are on sale again. No longer available at Post Offices.
Past Issues of Index Linked Certificates
Last updated 14
February 2012.