Is Citigroup’s criticism of NS&I Index Linked Certificates fair?

Inflation is rising, interest rates are low and there was much relief amongst many savers when National Savings & Investments (NS&I) reintroduced their ever popular Index Linked Certificates. However Citigroup have criticised  the certificates, saying they offer poor value to the government and that they will make it harder for other banks and building societies to attract savers. We thought we would take a look at both sides of the argument and ask, do Citigroup have a point? What have they said? First covered in the Daily Telegraph Citigroup have made two criticisms of NS&I Index Linked Certificates. Firstly saying that the ...

Citigroup criticise National Savings Index Linked Certificates

Citigroup believe that the government should reduce the rates offered on the national Savings & Investments (NS&I) Index Linked Certificates as the rates are too attractive and are pulling money away from the banks. Citigroup criticised the recent expansion of the scheme saying that the interest rate was too high and that the government should be trying to raise money by issuing more gilts. The bank believes that the certificates are an expensive way for the government to borrow money as the interest promised to investors is likely to be above the yield paid on gilts. "While the new National Savings Index ...