National Savings & Investments (NS&I) have this morning opened their Index Linked Certificates for general sale. Since July last year they have only been available to those with maturing Certificates, however the popular savings product has now been reopened to the general public.
The relaunched Index Linked Certificates will only be available with a term of five years; previously a three year version was available. It will however still be possible to access savings before the end of the five year term, however if this is done within the first year no interest will be payable.
The interest element will again come in two parts. Firstly a payment linked to RPI (Retail Price Index) and an additional payment of 0.5%. This additional payment has been reduced from 1% on the previously available certificates.
As before the maximum amount that can be saved in the Index Linked Certificates will be £15,000 and the interest paid will again be tax free.
It will come as a relief to savers that the new Certificates will still be linked to RPI and tax free, although there will be some disappointment that the fixed interest payment has been reduced and that a Certificates with a term of three years have not been issued.
This point was addressed by NS&I chief executive Jane Platt who said she intended for the investments to be on sale for ‘a sustained period of time’ and ‘with this in mind we are offering a five-year term, only available direct from NS&I. We understand fully that we will see very high demand for index-linked savings certificates.’
Fixed rate certificates have also been issued which will pay an interest rate of 2.25%, as with the Index Linked Certificates this is tax free. However may not be as attractive to savers as the Index Linked Certificates.