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September 9, 2011 5:45 pm
Savers seeking to protect their cash from rising prices have just days to open an inflation-linked account with a bank or building society, following the withdrawal of National Savings and Investments (NS&I) index-linked certificates this week.
NS&I said it had stopped selling the certificates after attracting half a million investors since they were reissued in May. The government-backed provider is not expecting to issue any more until the next financial year.
According to savings analysts, that leaves only seven accounts on the market with a link to inflation, and many of these have closing dates in September.
Cambridge Building Society has said it will accept applications for its Inflation Linked Bond until Thursday.
This five-year product will pay an annual return equal to any rise in the retail prices index (RPI) plus a guaranteed 1 percentage point, with the pay-out received on maturity.
Andy Lucas, head of the society’s direct arm, said he had seen a “surge in customer interest” since the withdrawal of NS&I’s certificates.
Similarly, Yorkshire Building Society will only offer its six-year Protected Capital Account – which pays the greater of the rise in the RPI index or 0.25 per cent each year – until September 16.
Although this is a structured deposit provided by Credit Suisse, rather than a conventional savings bond, it can be held in a cash individual savings account (Isa) to produce tax-free inflation-linked returns.
A five-year bond will pay RPI plus 1.5 percentage points, while a three-year version pays RPI plus 0.5 percentage points.
Both the bond’s capital value and income payments will be linked to RPI.
It will be tradeable in tranches of £100 on the London Stock Exchange.
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