Citi-owned UK online bank Egg has just launched a Guaranteed Equity Bond which could pay an investment return of 26 per cent at maturity after three years. This is equivalent to 8.01 per cent AER and is payable provided the FTSE 100 finishes above its starting level at the end of the three year term.
The offer will be available until July 20th, and savers will be able to benefit from a total return of 26 per cent if the FTSE 100 has risen by maturity of the investment and this is good news for investors because even if the stock market fell from its initial level during the three years, they would still get back all of their initial investment at maturity of the bond.
Investors will be able to deposit any amount between £1,000 and £1,000,000 in the bonds
, and their capital is protected as long as they hold the bond until the maturity date. The Egg Guaranteed Equity Bond is available online to all existing or new customers with an Egg Savings Account.
Jonathan Gains, head of investments at Egg, commented on the issue of the new bond: "Given current economic uncertainty and rising prices and inflation, a potential return of 26% over the full term plus the addition of capital protection mean will appeal to investors who are cautious but looking for a potentially higher return than most deposit accounts can offer."
Furthermore, Newcastle Building Society announced the launch of a new Option Bond with a fixed rate of seven per cent gross/AER and a term of 26 months.
The new Fixed Rate Option Bond is available for all customers who invest a minimum of £500 up to a maximum of £1,000,000, and can be managed via branches, post, telephone and internet.
Steve Urwin, Senior Marketing Executive at Newcastle Building Society, stated: "This account provides savers with a competitive and secure rate of interest and is a great opportunity for customers who do not require immediate access to their funds."
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