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Perfect place to stash your cash

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    Perfect place to stash your cash

    http://www.guardian.co.uk/money/2008...ds.investments

    If you think inflation is set to hang around for a while, or you're fed up with price rises eating into your savings, it's worth taking a fresh look at NS&I's index-linked savings certificates - particularly if you're a higher rate tax payer.

    National Savings & Investments, to give it its full title, is offering three- and five-year savings products which give those earning more than £41,000 a savings rate equivalent to 9.33%.

    As inflation has surged, so has the attractiveness of these savings products. Both calculate the interest payable on the basis of the retail prices index - currently 4.6% - plus a bonus of 1%.

    And because the interest is paid tax free, higher-rate tax payers have the most to gain. That is getting very attractive at a time when stockmarkets are heading south.

    To get the best return you have to stay in for the full term, although you can get out after one year without losing interest.

    Those signing up to the three-year deal get RPI plus: 0.85% at the end of the first year; 0.95% in the second; and 1.21% in the third. Interest is paid annually. The RPI figure used for calculating interest is worked out using a formula that averages out inflation over the year. Savers can invest anywhere between £100 and £15,000 per issue - so you can put £15,000 in both a three- and a five-year certificate if you have the cash.


    Infact, with the other half, you can stash £60K away, and in 5 years time, prices might just have begun to stabilise.

    Boomed!

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