Financial Services > Investments > National Savings Certificates > Index Linked Savings Certificates

Index Linked Savings Certificates

If you are looking for a home for your money that is secure, tax-free and will keep pace with inflation, then it is worth considering index-linked savings certificates from National Savings.

One of the best things about them is that they keep pace with inflation, which means that the value of the capital you invest in them will remain stable in real terms. They are lump sum investments that are linked to movements in the Retail Prices Index, which is a measure of inflation.

You do need to be able to commit your money for either a two or five-year term, and need to be able to invest a lump sum of at least £100. Index-linked savings accounts are available in "issues" which each have separate fixed interest rates, depending on general interest rates and economic conditions at the time. You can put up to £10,000 in each issue, and all the money earned is tax-free.

 

The fixed rate terms does mean, however, that you may lock your money into a fixed interest rate, only to see general rates rise. Since they offer 100 per cent security, National Savings products don't pay the best rates in the market. It's worth comparing the rates available from best-buy deposit accounts, although these won't be paid tax-free. The higher the rate of tax you pay, the greater the benefit of investing in a product that offers tax-free returns.

Although the certificates can be a core part of your portfolio, if you are younger you should also consider equity-based investments, since over the longer term these have a greater earning potential.

You can get more information from the National Savings website (www.nsandi.com), from Post Offices, or by calling 0845 964 5000.

www.Investments.co.uk covers every type of investment available in the UK. You can also visit us at www.Investments.co.uk/Property_Investments for everything you need to know about investing your money in property.

 

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