NS&I - Index linked savings certificates

Description

1. This agreement applies to National Savings Certificates (“Certificates”), and these terms and conditions have been set pursuant to section 12 of the National Loans Act 1968. These terms and conditions set out the obligations we have to you, as a customer, and the obligations you have to us. Please read these carefully and keep for reference.

2. Certificates are a UK Government security subject to the Savings Certificates Regulations 1991 (Statutory Instrument Number: 1991/1031) as amended or re-enacted from time to time (see paragraph 89). In the event of any differences between these terms and conditions and the Regulations, the Regulations will prevail.

Definitions

3. In these terms and conditions:

• (a) “anniversary date” means any anniversary of the date of purchase of a Certificate (except any falling after the maturity date), but if the date of purchase was 29 February, the anniversary date will always be 28 February (even in leap years);

• (b) “BACS” means the Bankers Automated Clearing Service;

• (c) “banking day” means a day (other than a Saturday, Sunday or bank holiday) on which banks are generally open for business in London, and, in relation to the processing of a payment, any other place of receipt;

• (d) “calendar month” means a named month beginning on its first day and ending on its last (eg 1 to 31 January);

• (e) “Certificate” means a National Savings Index-linked Certificate;

• (f) “Director” means the Director of Savings;

• (g) “Gazettes” means the London, Edinburgh and Belfast Gazettes;

• (h) “maturity date” means the day after the last day of the term;

• (i) “NS&I” means National Savings and Investments;

• (j) “post office” means a branch of Post Office Ltd in the UK (this does not include post offices in the Channels Islands and the Isle of Man);

• (k) “Reinvestment Certificate” means an Index-linked Certificate where:

  • (i) the Certificate is purchased from the proceeds of cashed in National Savings Certificates or Ulster Savings Certificates of any Issue (including non Index-linked Issues) and is to be held in the name of the person who held the cashed in Savings Certificates;

  • (ii) the encashment and purchase are made simultaneously by means of a completed reinvestment application sent to NS&I or, in the case of Ulster Savings Certificates, by means of a completed reinvestment application sent to the Ulster Savings Branch, Bangor; and

  • (iii) the Savings Certificates cashed in were not cashed in before their maturity date;

• (l) “RPI” means the Retail Prices Index compiled by the Office for National Statistics, or any Index replacing it;

• (m) “term”, except in paragraphs 72 and 73, means the period for which rates of interest were fixed at the time of purchase of the Certificate, regardless of whether the Certificate continues to earn interest after that term (see also paragraphs 7 to 9 inclusive).

Meaning of complete month

4. For the purposes of these terms and conditions, a month is completed at the end of the day immediately before the same date as the date of purchase of a Certificate, but in a month following the month of purchase (for example, for a Certificate purchased on 5 January, the first month is completed at the end of 4 February).

5. Where the date of purchase was 29, 30 or 31 of a month, and a later calendar month does not contain such a date, the relevant month is completed at the end of the day preceding the last day of that calendar month (for example, for a Certificate purchased on 31 March, the first month is completed at the end of 29 April).

6. In the case of a Certificate with a purchase date of 29 February, every 12th month will be completed at the end of 27 February, even where that month falls in a leap year.

Investment terms

7. A Certificate grows in value by index-linking and earning interest at rates fixed for a specified period of time, which will not be less than one year, starting on the date of purchase. We call each period of time a term.

8. In the case of terms expressed as a number of months, the term ends when the last month is completed (see paragraphs 4 to 6 inclusive).

9. In the case of terms expressed as a year or a number of years, the last day of the term will be the day which immediately precedes the relevant anniversary date (eg the last day of a one year term beginning on 5 January will be 4 January in the following year).

Issues of Certificates

10. Each Certificate issued belongs to an “Issue” (eg 3-year Issue 19). Each Issue has a term and specific interest rates that apply to it.

11. Any Issue can be withdrawn from sale without notice. An application can only be accepted for Issues on sale on the date of purchase (see paragraphs 32 and 33).

12. The details applicable to each Issue offered under these terms and conditions will be:

• published on the NS&I website;

• published in our Interest Rates leaflet available at post offices and from NS&I;

• published in the Gazettes; and

• made available directly from NS&I over the phone.

The index

13. An index-linked valuation under these terms and conditions will be related to the movement of the RPI. This movement is indicated by the RPI figure issued monthly and subsequently published in the Gazettes.

14. For the purposes of these terms and conditions, the RPI figure applicable to any calendar month will be the RPI figure published in the immediately preceding month. For example if you invest in March, we would use the RPI figure for January (published by the Office for National Statistics part way through February) as your RPI start level.

Calculating index-linking

15. An index-linked value will be calculated as V x B/A where:

• (a) ‘V’ is the value of the Certificate at the beginning of the index-linked period (this will be the purchase price or the value at an anniversary date);

• (b) ‘A’ is the RPI start level and is the index figure applicable to the calendar month in which the first day of the index-linked period falls (this will be the purchase date or an anniversary of it); and.

• (c) ‘B’ is the RPI end level and is the index figure applicable to the calendar month in which the day after the final day of the index-linked period falls. This will be the maturity date, an anniversary date, or the day after the last completed month for which index-linking is earned.

16. In the event of the calculation in paragraph 15 producing a negative value, no index-linking will be applied.

17. If the RPI is reset to 100 points the Director will calculate notional RPI figures designed to produce as closely as practicable the same effect as if the RPI had not been so reset. These will apply to Certificates bought before the revision.

Index-linking and interest

18. Interest and any positive index-linking will be calculated and applied on each anniversary and on the maturity date. Refer to paragraphs 60 and 62 to 66 inclusive, for the amount due when cashing in before the maturity date.

Tax

19. Sums payable in respect of interest and any index-linking will be free of UK Income Tax and Capital Gains Tax.

Who may purchase and hold Certificates

20. Individuals Individuals of at least 7 years old may purchase and hold Certificates:

• (a) in their own name; or

• (b) jointly with one or more other individuals.

• Any other person may also purchase Certificates on your behalf and in your name.

21. Children Children under 7 years of age cannot purchase Certificates. Certificates may be purchased for a child under 7 years of age to be held in the name of the child. Certificates may similarly be purchased for two or more such children to be held in their names jointly.

22. Trustees Certificates may be purchased and held in trust by yourself or jointly with one or more other trustees. Corporate trustees may also purchase and hold Certificates. The Certificates can be held by the trustee(s) only or jointly with the beneficiary(ies).

23. Deputies Deputies Certificates may be purchased on behalf of, and in the name of, a person who lacks capacity, by a person who is legally entitled to make investments on their behalf.

24. Others Registered friendly societies or any other body of persons approved by the Director may purchase and hold Certificates. Any other person may also purchase Certificates on behalf of, and in the name of, such a society or other body.

25. General Certificates may not be purchased by a person under a legal disability subject to paragraphs 20 to 23 inclusive.

How to purchase Certificates

26. An application to purchase Certificates can be made:

• (a) via the internet;

• (b) by telephone: or

• (c) by post to NS&I.

27. Only personal applications can be made via the internet and by telephone.

28. Because Certificates on sale at any one time may have different terms, you must specify your choice of term when you apply to purchase.

29. Where an applicant applies by telephone or via the internet, the Certificates must be purchased using a debit card in the name of the proposed Certificate holder issued by a UK bank or building society. This means that Certificates can only be purchased by telephone or via the internet where the applicant is able and authorised to use a debit card in the name of the proposed Certificate holder (and not, for example, where a parent applies to purchase Certificates on behalf of a child).

30. Where an applicant makes an application via the internet or by telephone and this is the first application, the applicant must confirm the application by signing and returning a confirmation form we will send to them by post. The form will specify the time within which the signed form must be returned to us. If the form is not received by us within the specified time we will not be able to process the application. If this is the case any money paid to us will be refunded to the relevant debit card or by issuing a crossed warrant (like a cheque). However, we reserve the right to use a different method of payment if necessary. No interest will be earned or paid.

31. When an application is made by post the Certificate must be purchased using a cheque drawn on a UK bank or building society account held by the proposed Certificate holder, or applicant where different, or by a building society branch cheque or banker’s draft.

32. In all cases, an application to purchase is subject to acceptance by us.

33. Once an application is accepted, the date of purchase of Certificates will be:

• (a) for applications sent by post, the date the application and payment were received at NS&I. No responsibility will be accepted for applications which are lost in the post, or affected by postal delays. Proof of posting will not be accepted as proof of delivery;

• (b) for applications via the internet, the date that NS&I received the online application and authority for a debit card payment in the name of the applicant, subject to authorisation of the debit card payment from the card issuer;

• (c) for applications made by telephone, the date that NS&I took the details of the application and authority for a debit card payment in the name of the applicant, subject to authorisation of the debit card payment from the card issuer. Where a telephone application takes place over two dates in one continuous call, ie beginning before midnight and ending after midnight, the date that NS&I took the details of the application and authority for a debit card payment in the applicant’s name will be the date that the call began.

34. Once an application has been accepted, the Certificate holder will receive a certificate of investment showing the amount and date of purchase.

Evidence of identity

35. Under Money Laundering Regulations we are required to verify the identity and address of our customers before we can accept an application to invest. To do this we may make electronic checks using data from a third party including information from the Electoral Register. In accepting the terms and conditions the applicant confirms that they, and anyone else named on the application, are aware that their identity and address will be checked.

36. We may also request documentary evidence of identity and address. The request for evidence of identity will specify the time within which the evidence must be returned to us. If the evidence is not received by us within the specified time we will not be able to process the application. No responsibility will be accepted for documents which are lost in the post, or affected by postal delays. Proof of posting will not be accepted as proof of delivery.

37. If we are unable to process an application due to lack of evidence of identity, the application will be cancelled from inception and any money paid to us will be refunded to the relevant debit card or by issuing a crossed warrant (like a cheque) to the purchaser named on the application form. However, we reserve the right to use another method for payment if necessary. No interest or index-linking will be earned or paid.

Cancellation rights

38. As Savings Certificates are a fixed rate investment with a set term, there is no right to cancel after investment.

Purchase and holding limits

39. The minimum for each purchase is £100, except for Reinvestment Certificates where there is no minimum.

40. An applicant may apply to purchase any amount subject to the maximum holding limit in paragraph 41.

41. An applicant may not apply to purchase a Certificate of any Issue if immediately after that purchase the holder would hold, either solely or jointly with any other person, more than £15,000 in Certificates (at purchase price) of that Issue. This does not apply to Reinvestment Certificates, where there is no maximum, nor do Reinvestment Certificates count in applying the limit to other holdings of the same Issue.

42. Where Certificates are held in joint names of two or more persons, the total value of the Certificates (at purchase price) will be counted against each of the joint holders when reckoning the value of Certificates held by them for this purpose.

43. Certificates held by someone as a trustee will not count towards their own holding.

44. Certificates held in the joint names of a trustee and beneficiary will not count towards the beneficiary’s own holding.

45. The maximum holding limit applies to trust holdings but each trust is treated separately.

46. If a person inherits Certificates which causes their holding per Issue to exceed the maximum holding limit, they may retain those Certificates in excess but cannot buy further Certificates of that Issue if it would cause their holding (including inherited Certificates) to exceed, or further exceed, the maximum holding limit.

47. The Regulations (see paragraph 2) provide for how the limit applies in special cases.

Cashing in

48. Certificates purchased by cheque or debit card can only be cashed in after payment has cleared. However, in certain circumstances, we may allow Certificates purchased by debit card to be encashed before the payment has cleared. If so allowed, we will repay the sum requested to the debit card from which the payment was made. It will normally take seven banking days from the date of purchase for payments to clear. For example, if we receive a cheque on a Monday, the payment will be cleared on the Tuesday of the following week. One additional day should be allowed for each English bank holiday. The same clearance periods apply for debit card payments.

49. Certificates can be cashed in by completing a form (available from NS&I) and sending it to NS&I with your certificate of investment. Any index-linking and interest due on repayment will be in accordance with paragraphs 18 and 60.

50. Certificates cashed in before the maturity date can be reinvested in any Issue of National Savings Certificates (Fixed Interest or Index-linked) then on sale (subject to the relevant terms and conditions). The date of encashment and of reinvestment will be deemed to be the date of purchase on the new certificate of investment. Matured funds can only be reinvested once. Any subsequent reinvestment of those matured funds will be treated as a new investment and therefore will only be possible if there are any Issues available at the time. Such subsequent reinvestments are subject to the holding limit (see paragraph 41). We will normally carry out the reinvestment within five days of receiving the instructions to cash in, however this is not guaranteed.

51. Partial encashments Part of the current value of a Certificate may be cashed in or reinvested as in paragraphs 48 to 50, 52 to 59 and 71. The value repaid or reinvested will be made up of part of the purchase price of the Certificate, together with any index-linking and interest that part has earned. A replacement certificate of investment, showing the original date of purchase and the balance of the purchase price remaining, will be issued.

Payments by electronic transfer

52. Payment will normally be made by electronic transfer to a UK bank account (including a National Savings Bank Investment Account) or a building society account within five working days of receiving the instructions to cash in. But this cannot be guaranteed.

53. We intend to use BACS as the means of making these electronic transfers (although we reserve the right to use a different means if necessary).

54. Once we have initiated the electronic transfer, the date the Certificate is cashed in will be taken to be the date on which, in the normal course, the requested amount would be credited to the specified bank or building society account. In the case of BACS, this is normally two banking days after we initiate the transfer.

55. Where an electronic transfer is initiated properly we will not be liable for:

• (a) any failure or delay of the receiving bank or building society in crediting the specified account; or

• (b) any failure or delay in any part of the electronic process which is beyond our direct control;

• including any failure which occurs because the specified account is incapable of receiving an electronic transfer.

Payments by crossed warrant

56. In exceptional circumstances payment can, on request, be made by crossed warrant (like a cheque). In such cases the date a Certificate is cashed in will be taken to be the date on the warrant.

57. We will normally put the warrant in the post within five working days of receiving the instructions to cash in however this cannot be guaranteed.

Children

58. The Director will repay Certificates held in the name of a child under 7 years of age to any person (on their instructions) who satisfies the Director that he or she is a proper person to receive payment. Normally, that person will be the parent or legally-appointed guardian.

59. Once a child has reached the age of 7 years, repayment will normally only be made to the child, on his or her instructions.

Amount due when cashing in

60. No index-linking or interest will be earned in respect of a Certificate which is cashed in before the first anniversary date. Therefore the amount due will be the purchase price. This does not apply to Reinvestment Certificates (see paragraphs 65 and 66).

61. The amount due when a Certificate is cashed in on the maturity date will be the maturity value (see page 7 of the Index-linked Savings Certificate brochure for how this is calculated).

62. The amount due when a Certificate is cashed in on an anniversary date (except where it is also the maturity date) or less than one complete month afterwards, will be the relevant anniversary value (see page 7 of the Index-linked Savings Certificate brochure for how this is calculated). Anniversary values will be rounded to the nearest penny.

63. The amount due when cashing in a Certificate which has been held for at least one complete month from an anniversary date will be the anniversary value on that anniversary date plus:

• (a) any positive index-linking for each complete month from that anniversary date to the date of repayment; and

• (b) 1/12th of the annual interest for each complete month held from that anniversary date.

64. In the event of a decrease in the RPI level, negative index-linking will not be applied. The value of the Certificate at the previous anniversary plus interest as detailed in paragraph 63(b) will be received. This paragraph does not apply to any month not completed before the maturity date.

65. The amount due when cashing in a Reinvestment Certificate before the first anniversary date, but which has been held for at least one complete month from the date of purchase, will be the purchase price plus:

• (a) any positive index-linking for each complete month from the date of purchase to the date of repayment; and

• (b) 1/12th of the annual interest for each complete month held from the date of purchase.

66. In the event of a decrease in the RPI level, negative index-linking will not be applied. The purchase price of the Reinvestment Certificate plus interest as detailed in paragraph 65(b) will be received.

67. In the event of a decrease in the RPI level, the value of a Certificate at an anniversary date or maturity date will be equal to its value at the previous anniversary date (or purchase date in the case of the value at the first anniversary) plus interest at the relevant rate for the year.
For example, if the RPI level decreased for the whole term of a Certificate, the value of the Certificate would be the purchase price plus the relevant compound interest rates applicable for each year to that particular Issue of Certificate.

68. The amount due when a Certificate is cashed in after a maturity date will never be less than the maturity value.

69. The value of a Certificate will be rounded to the nearest penny when cashed in.

Repayment of Certificates by NS&I

70. We can repay Certificates immediately, without needing an application for repayment, if:

• (a) we reasonably think any of the persons named in the application have provided false information;

• (b) we reasonably suspect that the Certificates are being held for an illegal purpose;

• (c) the applicant was not entitled to purchase the Certificate, or the Certificate holder is not entitled to hold the Certificate;

• (d) the Certificate holder’s holding exceeds the maximum allowable (see paragraph 41)(to the extent that the holding exceeds the maximum allowable in any one Issue);

• (e) the Certificate holder fails to comply, in a material manner, with the terms or conditions for holding the Certificate; or

• (f) we have any other valid reason to do so.

Joint investments

71. Where Certificates are held jointly by two or more holders:

• (a) the Certificate will be the joint property of all holders;

• (b) to give any instructions relating to the Certificate all holders need to sign;

• (c) in the event of the death of a joint Certificate holder, full ownership will pass to the survivor(s) who will be entitled to operate the Certificate on the same terms;

• (d) if a Certificate holder tells us of a dispute, we may freeze the Certificate until we receive written instructions from all holders. The Certificate will continue to earn index-linking and interest.

Retention after the fixed rate term

72. After the original term (or any further term for which index-linking and/or interest is earned under this paragraph), a Certificate may be eligible to earn index-linking and/or interest for a further term of the same length. The Treasury will decide whether this will apply and, if so, on what terms as to index-linking and/or interest. If such index-linking and/or interest does apply, it will be applied automatically and will be guaranteed for the whole of the further term, but the holder will remain free to cash in the Certificate at any time (including for reinvestment into another Issue, if available, or another NS&I product).

73. After the original term (or any further term for which index-linking and/or interest is earned under this paragraph), the holder may be eligible to reinvest into another Savings Certificate of a different term and/or type. The Treasury will decide whether this will apply and, if so, on what terms as to index-linking and/or interest. If such index-linking and/or interest does apply, all holders wishing to reinvest will be required to provide instructions to the Director as to the term and type of Savings Certificate.

74. We will write to the holder, at the last recorded address for the holding, shortly before the end of each term to tell them of the Treasury’s decision.

Liability

75. If you tell us that a repayment from your holding was not authorised by you, we will carry out an investigation. As soon as we are reasonably satisfied that you did not authorise the repayment, we will, subject to paragraph 76, refund the amount repaid and will return your holding to the position it would have been in if the unauthorised repayment had not taken place. This means that, in addition to the amount of the unauthorised repayment, we will pay any index-linking and/or interest on the amount incorrectly paid but we will have no further liability.

76. However, you will be liable for all repayments made from your holding if you have acted fraudulently.

77. If you ask us to make a repayment by electronic transfer and, after a reasonable period has elapsed, the bank or building society to which payment should have been made says that it did not receive the payment, we will refund the amount of the payment and return your holding to the position it would have been in if the payment had not been made, except in the following cases:

• (a) there was a mistake in any of the details contained in the repayment instructions you gave us. If this is the case, we will make reasonable efforts to recover the funds;

• (b) we can show that the payment was in fact received by the bank or building society to which payment should have been made.

How we use your information

78. We may use any information provided to us to help us:

• (a) manage Certificates;

• (b) prevent and detect crime;

• (c) understand our customers’ requirements; and

• (d) develop and test products and services.

• It is important that we are advised of any change in details.

79. We treat all the information we hold concerning customers as private and confidential. We will not reveal any personal details or details concerning a customer’s investments to anyone not connected to NS&I, unless:

• (a) the customer asks us to reveal the information or we have the customer’s permission to do so;

• (b) we are required or permitted to do so by law;

• (c) it is required by credit reference and fraud prevention agencies and other companies that provide a service to us or the customer; or

• (d) there is a duty to the public to reveal the information.

80. If you are a joint applicant we will pass your information to the other joint applicant(s). When giving us information about another person, you confirm that they have appointed you to act on their behalf. This includes providing consent to process their data as set out in these terms and conditions.

81. We may monitor or record telephone calls for training, quality assurance and other business purposes.

82. From time to time we may change the way we use customer information. Where we believe that customers may not reasonably expect such a change we will notify them personally. If customers do not object to the change within 60 days, we will deem them to have consented to that change.

83. Your information will be held by us in both paper form and on our IT systems and will be kept after the holding is closed in line with our retention procedures. If you would like a copy of the information we hold about you, please make a Data Subject Access Request under the Data Protection Act and send it to: The Data Protection Officer, National Savings and Investments, 1 Drummond Gate, London SW1V 2QX - make sure your request is signed. You can print off and complete the form available in the 'Privacy' section of the NS&I website or write to the Data Protection Officer giving us your full name, current address and any previous addresses, which savings or investments you have with us and the account, holder's or customer numbers. There may be a small charge for this service - if so, we will let you know.

84. We would like to keep customers up to date with information about our products and services which we think might interest them. If a customer does not want to receive this information they can contact us using the details at the end of these terms and conditions.

Complaints

85. If we make a mistake we’ll aim to put things right quickly and without fuss, and we have a procedure designed to resolve complaints effectively and fairly. Complaints can be made in writing to the Customer Service Team at the address at the end of these terms and conditions, by calling us free on 0800 092 1286 (calls from mobiles may not be free), or by visiting nsandi.com, clicking ‘Contact us’, clicking on the ‘Contact us online’ button in the ‘Email us’ section, and selecting ‘complaint’ in the ‘subject’ dropdown menu. A leaflet describing our complaints procedure is available on request or you can download one at nsandi.com, clicking ‘Why save with us’, clicking on ‘Our commitment’ and then clicking on the link under the heading ‘Not happy with our service?’.

86. If a customer feels that we have not resolved their complaint to their satisfaction, they may be able to refer it to the Financial Ombudsman Service (FOS) at South Quay Plaza, 183 Marsh Wall, London E14 9SR (Tel 0800 023 4567). The FOS is an organisation set up by law to give consumers a free and independent service for resolving disputes.

Changes to these terms and conditions

87. The Treasury reserves the right to amend these terms and conditions at any time. If the change is to the Certificate holder’s detriment we will let them know personally at least 30 days before the change. If this is the case you can switch to another NS&I product or cash in your Certificate without notice or penalty within 60 days of us telling you.

88. For any other changes we will let customers know by updating our website and, if appropriate, in a range of national newspapers.

Regulations

89. As at 1 May 2011, The Savings Certificates Regulations 1991 (Statutory Number 1991/1031) have been amended by the following Statutory Instruments:

90. Copies of UK legislation can be purchased from the TSO Parliamentary and Legal Bookshop.

Law and jurisdiction

91. These terms and conditions and any agreement made on the basis of them will be governed by and interpreted in accordance with English law and available in the English and Welsh languages.

92. In the event of the death of a Certificate holder, the Director reserves the right to make any payment in respect of the Certificate in accordance with the law of the place in which the Certificate holder resided, or if different, was domiciled at the date of their death.

93. Subject to paragraphs 94 and 95, the courts of England are to have exclusive jurisdiction to settle any dispute (including claims for set off and counterclaims) which may arise in connection with these terms and conditions or any agreement made on the basis of them and which, subject to the Regulations, falls to be determined by a court of law.

94. Where section 16 of the Civil Jurisdiction and Judgments Act 1982 applies the relevant court of law of the relevant part of the United Kingdom shall have jurisdiction to settle any such dispute.

95. Paragraphs 93 and 94 are included for the benefit of NS&I. Accordingly NS&I retains the right to bring proceedings in any other court which has jurisdiction to whose jurisdiction the holder irrevocably submits.

Savings Certificates
National Savings and Investments
Glasgow
G58 1SB
Telephone 0500 007 007
Fax 0141 636 8744

12 May 2011
PLEASE KEEP FOR REFERENCE