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NSandI 3yr Green Bond at 0.65%

Discussing offers, rates and deals on suppliers
Gan020
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NSandI 3yr Green Bond at 0.65%

#452191

Postby Gan020 » October 22nd, 2021, 10:42 am

Which is the same rate availble on a instant access account.

The general public get screwed over again. Institutions get 0.75% on a 3 year gilt.

dealtn
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Re: NSandI 3yr Green Bond at 0.65%

#452194

Postby dealtn » October 22nd, 2021, 10:53 am

Gan020 wrote:Which is the same rate availble on a instant access account.

The general public get screwed over again. Institutions get 0.75% on a 3 year gilt.


The general public can buy those same gilts too (and accept the variability and risk of capital movement). Where precisely is this "screwed over" taking place please?

richlist
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Re: NSandI 3yr Green Bond at 0.65%

#452217

Postby richlist » October 22nd, 2021, 12:11 pm

I've never been prepared to tie money up for 3 years. With inflation rising, fixing interest at 0.65% doesn't sound like a good idea to me. I'm gonna give it a miss.

didds
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Re: NSandI 3yr Green Bond at 0.65%

#452237

Postby didds » October 22nd, 2021, 1:25 pm

richlist wrote:I've never been prepared to tie money up for 3 years. With inflation rising, fixing interest at 0.65% doesn't sound like a good idea to me. I'm gonna give it a miss.


Indeed. especially when the rate is hardly (0.5%/) better than an instant access account elsewhere anyway, and in fact less (0.5%) for only tieing your cash up for 120 days.

Gan020
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Re: NSandI 3yr Green Bond at 0.65%

#452243

Postby Gan020 » October 22nd, 2021, 1:41 pm

dealtn wrote:
Gan020 wrote:Which is the same rate availble on a instant access account.

The general public get screwed over again. Institutions get 0.75% on a 3 year gilt.


The general public can buy those same gilts too (and accept the variability and risk of capital movement). Where precisely is this "screwed over" taking place please?



Ok, point well made. As a matter of interest how would I go about actually buying gilts. I'm interested in the inflation linked ones but I'm sure the principle is just the same.

Spet0789
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Re: NSandI 3yr Green Bond at 0.65%

#452295

Postby Spet0789 » October 22nd, 2021, 3:58 pm

Gan020 wrote:
dealtn wrote:
Gan020 wrote:Which is the same rate availble on a instant access account.

The general public get screwed over again. Institutions get 0.75% on a 3 year gilt.


The general public can buy those same gilts too (and accept the variability and risk of capital movement). Where precisely is this "screwed over" taking place please?



Ok, point well made. As a matter of interest how would I go about actually buying gilts. I'm interested in the inflation linked ones but I'm sure the principle is just the same.


Index linked gilts trade at negative real yields. In other words you are guaranteed to lose money in real terms.

There are queues of pension funds effectively forced to buy them. As a result they are expensive. As a private investor, don’t bother, unless you have a really strong view that U.K. inflation will explode.

GeoffF100
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Re: NSandI 3yr Green Bond at 0.65%

#452352

Postby GeoffF100 » October 22nd, 2021, 7:56 pm

JN Bank is Money Saving Expert's best buy for a 3 year bond:

https://www.moneysavingexpert.com/savin ... -interest/

It pays 1.81% p.a. The government's green bond is rubbish. Here are the yield curves for index linked gilts:

https://www.bankofengland.co.uk/statistics/yield-curves

The inflation rate at which index linked gilts return the same as conventional gilts is above the Bank of England's target inflation rate of 2%, but the inflation rate is above that level too. The 2% target is subject to satisfactory growth and employment:

https://www.bankofengland.co.uk/-/media ... t-2021.pdf

"The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet
the 2% inflation target, and in a way that helps to sustain growth and employment."


Relative to conventional gilts, index linked gilts are a reasonable buy. They are not subject to CGT and some have coupons of 0.125%, so there is not much income tax to pay either. Nonetheless, conventional gilts pay rubbish interest rate in comparison with the best savings accounts. Cash ISA rates are not as good, and transferring ISAs is currently a nightmare.

You can buy gilts directly through a stockbroker. The retail spreads are wide for small trades but reasonable for trades of £50K plus. You can also buy units or shares in gilt funds.

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Re: NSandI 3yr Green Bond at 0.65%

#452358

Postby GeoffF100 » October 22nd, 2021, 8:16 pm

The 0.125% new style index linked gilts have to be dealt on the telephone. Other gilts can be dealt online by some brokers. You may get narrower spreads for smaller trades on these. Have a look and see what you are quoted.

chas49
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Re: NSandI 3yr Green Bond at 0.65% - (now 1.3%)

#482320

Postby chas49 » February 23rd, 2022, 10:59 am

New issue at 1.3%

Issue 2: 1.30% gross/AER, fixed for 3 years

https://www.nsandi.com/products/green-savings-bonds

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Re: NSandI 3yr Green Bond at 0.65%

#482325

Postby AleisterCrowley » February 23rd, 2022, 11:05 am

Not taxable until maturity, so may be a good way to move income to post-retirement when one may be in a lower tax bracket

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Re: NSandI 3yr Green Bond at 0.65%

#482334

Postby chas49 » February 23rd, 2022, 11:28 am

AleisterCrowley wrote:Not taxable until maturity, so may be a good way to move income to post-retirement when one may be in a lower tax bracket


Max £100K so only £1300 taxable income to shift. (p.a.)

Best 3-yr fixed cash ISA rates currrently beat this rate - although you can't put £100k of new money in them...

didds
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Re: NSandI 3yr Green Bond at 0.65%

#482338

Postby didds » February 23rd, 2022, 11:35 am

Im probably missing something but MSM suggests there are plenty of other institutions offering a 3 year lock in for substantially higher returns - 1.92% with Al Rayan for example.

mc2fool
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Re: NSandI 3yr Green Bond at 0.65%

#482368

Postby mc2fool » February 23rd, 2022, 1:58 pm

didds wrote:Im probably missing something but MSM suggests there are plenty of other institutions offering a 3 year lock in for substantially higher returns - 1.92% with Al Rayan for example.

And there are even better normal accounts (not Sharia) offering higher rates for a 1 year fix.

Of course NS&I rates should be a tad lower than the market 'cos of being backed by the Treasury, but much more than that NS&I's rates reflect the desire of HMG to borrow, which, having borrowed gazillions in the past couple of years, is pretty low at the moment. Consequently all of NS&I's interest rates are uncompetitive currently, with some, like the Investment Account, even being at 0.01%. Methinks it's pretty clear they're not trying to attract new money into that. ;)

Indeed, even the number of accounts they have on offer is pretty low at the moment. Compare with what's been available in the past. https://www.nsandi.com/historical-interest-rates.

The Index Linked Certificates are the most missed on these boards, I reckon. The Green Bonds are, of course, really a political offering. Uncompetitive, yeah, HMG doesn't really want your money, but NS&I is an institution and has to keep ticking over nevertheless....

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Re: NSandI 3yr Green Bond at 0.65%

#482370

Postby AleisterCrowley » February 23rd, 2022, 2:27 pm

What's the three year Gilt yield now? I'm never quite sure how to read some of the data - looks like 1.35% ish

mc2fool
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Re: NSandI 3yr Green Bond at 0.65%

#482374

Postby mc2fool » February 23rd, 2022, 2:50 pm

AleisterCrowley wrote:What's the three year Gilt yield now? I'm never quite sure how to read some of the data - looks like 1.35% ish

The closest to a 3 year gilt (listed on HL at least) is the Treasury 5% 2025. maturing 7-Mar-2025

https://www.hl.co.uk/shares/corporate-b ... &order=asc
https://www.hl.co.uk/shares/shares-sear ... ury-5-2025

Bunging the current buy price (111.20), the coupon (5%) and years to maturity (3) into http://www.candidmoney.com/calculators/ ... calculator gives a redemption yield of 1.18%. The running yield of 4.5% will be taxable, as interest (if not in an ISA etc), while the capital loss will not be usable against other gains, as gilts are CGT free.

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Re: NSandI 3yr Green Bond at 0.65%

#482376

Postby AleisterCrowley » February 23rd, 2022, 3:00 pm


mc2fool
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Re: NSandI 3yr Green Bond at 0.65%

#482407

Postby mc2fool » February 23rd, 2022, 7:10 pm

AleisterCrowley wrote:https://www.cnbc.com/quotes/GB3Y-GB

???

Ugh! What a useless page! No proper name (gilts aren't called anything like "British 3 Year Gilt"!), no ISIN or other identifier, and no indication what the yield referred to actually is, leaving the reader to intuit that it's the redemption yield (not the running yield).

Ok, so on a little investigation, https://www.dmo.gov.uk/data/pdfdatareport?reportCode=D1A, this seems to be 0¼% Treasury Gilt 2025 GB00BLPK71, and we can find prices for that at https://www.londonstockexchange.com/stock/TN25/united-kingdom/company-page.

Bunging the current buy price (97.24), the coupon (0.25%) and years to maturity (3) into http://www.candidmoney.com/calculators/ ... calculator gives a redemption yield of 1.19%. Using the sell price (96.74) instead gives 1.37%, but of course you can't buy it at the sell price ... ;)

AleisterCrowley
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Re: NSandI 3yr Green Bond at 0.65%

#482413

Postby AleisterCrowley » February 23rd, 2022, 8:12 pm

That's a big spread? Or is there some shenanigans with clean and dirty prices?

Yeah, I assumed it was the yield to maturity quoted. Isn't that based on the buy price ?

(you can see why I avoid bonds)

didds
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Re: NSandI 3yr Green Bond at 0.65%

#482506

Postby didds » February 24th, 2022, 10:45 am

mc2fool wrote:
didds wrote:Im probably missing something but MSM suggests there are plenty of other institutions offering a 3 year lock in for substantially higher returns - 1.92% with Al Rayan for example.

And there are even better normal accounts (not Sharia) offering higher rates for a 1 year fix.


MSM is only showing 1.3% for 1 year fixed?

(Im still missing something clearly - LOL)

mc2fool
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Re: NSandI 3yr Green Bond at 0.65%

#482512

Postby mc2fool » February 24th, 2022, 11:07 am

didds wrote:
mc2fool wrote:
didds wrote:Im probably missing something but MSM suggests there are plenty of other institutions offering a 3 year lock in for substantially higher returns - 1.92% with Al Rayan for example.

And there are even better normal accounts (not Sharia) offering higher rates for a 1 year fix.


MSM is only showing 1.3% for 1 year fixed?

(Im still missing something clearly - LOL)

Dunno what MSM is but I long ago gave up on anything other than MSE, which always seems to be the most up to date.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/#fixedsavings


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