NS&I index linked saving certificates.

A question about : NS&I index linked saving certificates.

I invested Ј15000 in May 2011, for a 5 year term.
I did an estimate on the NS&I website which gives me an estimated figure of Ј16554 at the present time.
I will be leaving the money in for the full 5 year term. I know it's impossible to fully know what the yield will be after 5 years because of the uncertainties of the RPI rate.
However, I was wondering what members would be hoping to come out with on maturity if they've invested a similar amount.
Thank you.

Best answers:

• It doesn't matter. It will have a buying power greater than when you opened it.
  If you are hoping for, say a 53% increase, that only means that inflation will have been about 52% and you will be no better or no worse off than if you were expecting an increase of, say, 10%
• Yes, I can certainly recognise a lot of sense in what you're saying and thank you.
  However, I do think people have their own lifestyles which means their individual cost of living expenses may well be less, or more, than the official figures given when inflation details are published each month.
  To be honest, I'm a bit of a duffer with stuff like this, so would still be grateful if someone could suggest an amount they think I might come out with once my Ј15000 index linked certificates mature after five years.
• Not sure why you are asking for guesses - we can only guess.
  If you really need to know a range then the best thing to do would be to use an excel spreadsheet and input various RPI figures.
  That would at least give you a ball park for the range.
  Not sure how anyone else can help you with this.
  I just had a one year statement for 3rd April and the RPI figure was 2.67%.
• is it time to sell these certificates with inflation still going to fall
• Thank you all.
• I'll be keeping mine for the tax saving element as I use all my ISA allowances each year in Stocks and Shares ISA. Fixed 5 year 4-5% cash Isa's are now maturing and current rates are very poor. My S&S Isa's have given c. 15-20% p.a. returns over the last few years but at a much much higher risk profile....and no guarantees there.
• I also have Ј15k of these bought in May 2011 and with CPI falling below zero expect RPI to be negative (or very close to it) when the rates on these certificates are set. I'll have to look at the terms of the things in detail but I'm fairly sure that I can withdraw cash on each anniversary without penalty.
  I have an offset mortgage which I'm keeping running because it allows me to borrow at 1.5% so I could either pay almost all of that off or try to find an ISA worth worrying investing in.
  I've never held these certificates before so my question is whether I might be better off holding them for another year at a very low rate in the hope that NS&I give me the chance to roll it into a new product.
  I shall probably cash it in but any advice will be welcome.
• The 90 day interest penalty only applies if you invested or renewed after 20 September 2012.
• I hold Index Linked Certificates and I expect to be keeping them, Investing isn't about what is best today but rather about a strategy for the future. Index Linked Certificates may not have been the best return at any point in time but they are nearly totally risk free, have always meant that you will be a bit better off at the end of the period than you were at the beginning and, so far at least, have always offered to continue that with a new bond when the old one matures.
  They are the safest bit of my Portfolio.
  Remember that whilst maturing Index Linked Certificates can be Reinvested you cannot buy new ones and they will not pay a negative rate. The lowest that they can go is 0% plus the bonus in any year and inflation is RPI rather than CPI. RPI is currently 1.1% plus the bonus.
  Quite honestly if I could put all my money in them over the next 12 months I probably would.
• So RPI is now a mere 1.1% + my 0.5% bonus. That's 1.6% current interest.
  Time to cash them in and put the money into 65+ Granny Bonds paying 4% gross or 3.2% net.
  Anyone got a better plan?
• 1.6% Tax free if your bonds are the inflation + 0.5% type. The ones being renewed now are down to inflation RPI plus 0.05% .
  65+ Granny Bonds look interesting IF you are old enough which fortunately I am not. The limit on holdings is also a potential problem.
  I guess that a lot depends upon your expectation of future inflation.
• 0.75% reduction on the valuation of mine (2011 version) from last month to this.
  https://www.nsandi.com/ilsc-calculator