Index-linked Savings Certificates

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Index-linked Savings Certificates are British inflation linked bonds from National Savings and Investments, the state-owned savings bank in the United Kingdom. The bond terms are typically 2, 3 or 5 years. The returns are linked to Retail Price Index (RPI) with a tiny added interest rate on top. The Bonds can no only be cashed in at maturity.

Contents

Index-linked Savings Certificates are free from UK income tax making them relatively attractive to tax-payers, particularly higher rate tax-payers. They are backed by the Treasury of the UK Government so are considered to be safe deposits. The certificates used to be informally known as "Granny Bonds" because they were originally only available to savers who were over the retirement age. This is no longer the case. [1]

Issues

The bonds come in issues. Each issue has a per person investment limit, which as of 2011 was £15,000.

3 Year Issues
DateIssueReturn
19 July 2010withdrawnN/A
7 April 201020th IssueRPI + 1.00%
29 April 200919th IssueRPI + 1.00%
18 June 200818th IssueRPI + 1.00%
21 May 200817th IssueRPI + 0.70%
2 April 200816th IssueRPI + 0.25%
25 April 200715th IssueRPI + 1.35%
26 October 200614th IssueRPI + 1.15%
20 May 200613th IssueRPI + 1.05%
13 April 200612th IssueRPI + 0.90%


5 Year Issues
DateIssueReturn
7 September 2011withdrawnN/A
12 May 201148th IssueRPI + 0.50%
19 July 2010withdrawnN/A
7 April 201047th IssueRPI + 1.00%
29 April 200946th IssueRPI + 1.00%
18 June 200845th IssueRPI + 1.00%
21 May 200844th IssueRPI + 0.70%
2 April 200843rd IssueRPI + 0.35%
25 April 200742nd IssueRPI + 1.35%
20 May 200641st IssueRPI + 1.15%
13 April 200640th IssueRPI + 0.95%


2 Year Issues
DateIssueReturn
13 April 2006?th IssueRPI + 0.85%


On 19 July 2010, due to high investment levels the certificates were withdrawn from general sale in order to keep investments within the financing target set by HM Treasury. [2] After re-introduction in May 2011, this happened again on 7 September 2011. [3] [1]

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References

  1. 1 2 "New issues of NS&I Savings Certificates". National Savings and Investments. 14 May 2011.
  2. Changes to balance the interests of NS&I’s savers, taxpayers and the wider financial services marketplace
  3. NS&I WITHDRAWS SAVINGS CERTIFICATES FROM SALE. 7 September 2011