National Savings Index Linked Certificates Back

National Savings Index Linked Certificates Back.

Index-linked Savings Certificates will be relaunched by NS&I with a fixed interest rate of 0.50 per cent AER.  They will also be issuing Fixed Interest Savings Certificates which will pay 2.25 per cent AER.  The certificates will be tax-free and the minimum investment will be £100 and maximum investment of £15,000 per Issue.

Ashley Clark, Director at Need An Adviser, suggests that this is a signal that the Government expects significant interest rate rises to curb inflation.  “Inflation plus 0.5 per cent means Government expect in the longer term to increase base rates to control inflation.  If base rates go up to say 7 per cent or 8 per cent pa in a few years with Bank of England tackling inflation and keeping it below 5 per cent, then as an investor you lose on inflation pegged investing.  That said, it is attractive for any of us who want to protect the buying power only in our savings.”