Simply capital with Northern Rock

Northern Rock has launched a new Guaranteed Capital Bond with a choice of terms - the bond offering a potential return equivalent to 110% of the percentage rise in the FTSE 100 Index over a 3-year period, or a potential return of 135% of the percentage rise in the FTSE 100 Index over a 5-year period.

The new limited issue Guaranteed Capital Bond Issue 6 can be opened either by post or through Northern Rock branches and with a minimum opening balance of £5,000. Additional deposits £500 minimum can be made during the offer period up to a maximum of £2 million.

The product is linked to the growth of the FTSE 100 Index but without risk to capital. And there are no management fees or set-up charges. Customers can choose to invest for either 3 or 5 years.

No withdrawals are allowed during the chosen term. If the Footsie falls or remains the same over the period chosen, customers will receive their original capital back in full but with no interest paid.

The starting point for calculating any return will be the Footsie at the close of business on August 9th 2005 the benchmark level. The final level will be calculated as a monthly average taken over six months at the end of the 3-year option or over 12 months at the end of the 5-year option. Any interest payable will be credited to the account within 7 business days of the final level date.

Interest during the offer period is paid at 4.75% gross p.a. and will be paid at maturity on August 1st 2008 for the 3-year option, August 1st 2010 for the 5-year option.

Charge free transfers are allowed from all Northern Rock instant and notice variable rate accounts and fixed rate bonds, with the exception of existing Guaranteed Capital Bonds or the Fifty Fifty Equity Bond. Transfers from Save Direct or Tracker Online must be via the nominated bank account.

Upon maturity of the bond, withdrawals can be made without notice or charge.

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2005-07-11 01:12:22 © Moneyextra.com