Index Linked And Fixed Interest Savings Certificates Are Back

NS&I has reintroduced its Savings Certificates, including Index-linked Savings Certificates (or Inflation-Beating Savings) and Fixed Interest Savings Certificates.

Savings CertificatesThese new Savings Certificates are tax free (meaning they are both exempt from UK Income Tax and Capital Gains Tax) and available on a 5 year term.

With the Index-Linked Certificates, savings grow ahead of inflation, paying index-linking, as measured by the Retail Price Index, plus a fixed interest rate of 0.5% AER.

The minimum investment is £100 and the maximum £15,000 per issue.

As the savings account is designed for a 5 year term, no interest or index-linking paid if cashed in during the first year.

The Fixed Interest Savings Certificates earn a guaranteed fixed rateof 2.25% AER. The equivalent interest rate grossed up for higher rate tax payers is 3.75%.

Savers can invest in both issues, wit the maximum investment at £15,000 per issue.

Jane Platt, Chief Executive, NS&I, said:  “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. With this in mind we will be offering a 5-year term,  only available direct from NS&I.” comment: Savings Certificates were withdrawn from general sale in July 2010 due to exceptional demand which risked NS&I exceeding its Net Financing range for 2010-11.

The Government confirmed in its March budget that it has a Net Financing target of £2 billion, meaning it will need to achieve inflows of some £14 billion.

Many Brits are facing personal finance worries and looking for an opportunity to save money, both in terms of saving on bills and getting a good return on savings accounts. The reintroduction of these Certificates will no doubt be very much welcomed in support of this, generating a high level of demand.

Perhaps the easiest and quickest way to apply is via the NS&I website.

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