Index-linked Savings Certificates are 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 CPI with a tiny interest rate on top. Bonds can no longer be cashed in at any time, but only on maturity.

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 bonds come in issues. Each issue has a per person investment limit, currently 15000 pounds.

The certificates used to be known as "Granny Bonds" because they were originally only available to savers who were over the retirement age.

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On 19 July 2010, due to high investment levels the certificates were withdrawn from general sale in order to keep investments within the financing target set by HM Treasury.[1] After re-introduction this happened again on 7 September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

References

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