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.

These 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.”

MoneyHighStreet.com comment: Savings Certificates were withdrawn from general sale in July 2010 due to exceptional demand which risked NS&I exceeding its Net Financing range for 2010-11.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.