NS & I index-linked savings certificates

I think the interest rate works out to be 5.8% the nearest for a 5 year fixed rate account is Birmingham Midshires at 5.05%. But NS and I certs are a hedge against inflation. Where as most fixed rate 5 year accounts are not, they are just that-fixed rate. I've put in £15,000 before they withdraw the offer like they did last time. There is quite a demand for them apparently. Just using a proportion of my bank on them.

Remember you don't have to keep them for 5 years to get the inflationary hedge.

Certainly if you cash them within the first year you get no interest, but if you cash them after 12 months you get interest of 0.25% plus inflation, after 24 months interest of 0.35% plus inflation, and so on up to inflation plus 0.86% after 60 months.

So as the real reason for buying them is as an inflation hedge, in practical terms you only need to hold them for one year to get the benefits.