Inflation-beating NS&I bonds return to lift savers - Savings - News - Moneyfacts


Inflation-beating NS&I bonds return to lift savers

Inflation-beating NS&I bonds return to lift savers

Category: Savings

Updated: 12/05/2011
First Published: 12/05/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Savers finally have something to smile about after National Savings & Investments (NS&I) revealed the reintroduction of its popular index-linked bonds.

Providing savers with protection against the effects of inflation, NS&I's Index-Linked Savings Certificates, also known as Inflation-Beating Savings, proved so popular last year that they had to be withdrawn.

The good news is that they are back, but savers have been told to act fast – the issue will be withdrawn as soon as the quota of money NS&I is allowed to accept is reached.

The beauty of Index-linked Savings Certificates is that savings grow ahead of inflation, no mean feat in the current low interest rate, high inflation environment.

Up to £15K can be invested in the five year bond, with the interest paid being the rate of inflation as measured by the Retail Prices Index (RPI) plus 0.5%.

The minimum amount that can be invested is £100, while the returns are tax-free.

However, it is vital savers remember that the accounts are designed to be held for five years, and that no interest or index-linking is paid if it is cashed in during the first year.

"Our aim is to keep Savings Certificates on sale for a sustained period of time and to enable as many savers as possible who wish to invest to do so," said Jane Platt, chief executive of NS&I.

"With this in mind we will be offering a 5-year term, only available direct from NS&I.

"We understand fully that we will see very high demand for Index-linked Savings Certificates."

Patrick Connolly, head of communications at AWD Chase de Vere, said it was great news that the certificates are being re-launched, and that the products should form an important part of many investment portfolios, particularly for higher rate taxpayers.

"Many savers currently face the dilemma of losing money in real terms on their cash savings or putting their capital at risk as they try and generate better returns," he added.

"These products provide the only way that savers can be sure of getting returns greater than inflation while still protecting their capital."

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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