Money News
NS& I (National Savings and Investments) has launched a new issue of its Guaranteed Equity Bond (GEB) - the 5-year stockmarket-linked bond offering a gross return matching FTSE 100 Index growth, up to a maximum return of 70%, and without any risk to the investor's original capital.
For example, if the FTSE rose by 20% over the 5-year term, £10,000 invested would earn a gross return of £2,000 (customer receives £12,000 in total) at the end of the term. If the FTSE rose by 120% over the 5 years, £10,000 invested would earn a gross return of £7,000 (customer receives £17,000 in total) as a return of up to 70% of FTSE index growth.
While NS& I GEBs are linked to the FTSE, NS& I doesn't invest the money in equities, so investments in the bond won't be eligible for any dividends. Consequently, investors may not get as high a return as they might through investing directly in the stock market.
Customers can now invest in the GEB through a SIPP (self-invested personal pension). They should contact their SIPP provider for further details.
The GEB goes on sale for a limited period until April 29th, although it may close earlier if fully subscribed. Investors will earn interest at 4.75% p.a. gross until the bond's investment term starts on May 14th. This interest will be paid when the bond matures.
The minimum investment for the bond is £1,000, maximum £1 million per person, or £2 million for a joint investment. There are no fees or charges.
The start level for the bond will be based on 5 days' averaging while the final level will be the daily average over the final 6 months period.
11 March 2008 © Moneyextra.com
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