Investment Focus: Meteor FTSE Income Deposit Plan

Investment Focus: Meteor FTSE Income Deposit Plan

28 June 2011 / by Paul Dicken

As inflation remains well above its target rate at 4.50 per cent, savers and investors are struggling to find feasible options that provide a real return.

A new structured deposit plan from Meteor could bridge this gap. The plan protects your initial deposit while aiming to provide an annual income of 7.50 per cent; this potential return is above the rate available on savings, and competitive compared to the current yields on many investment funds.
 
As a six year plan, the Meteor structured deposit is a long term option. During this time the plan will pay a 7.50 per cent annual rate if the FTSE 100 closes each business day between 4,500 and 7,500 points. If during one year the FTSE 100 closes below 4,500 or above 7,500 then the income level will not be paid during that year.

Capital protection

As the plan is a structured deposit you will receive your initial deposit back in full after the six year term, regardless of what happens to the FTSE 100 Index, and as long as the deposit taker for the plan, Royal Bank of Scotland, is able to repay your money.

In the event that RBS is unable to meet its liabilities, the plan would come under the remit of the Financial Services Compensation Scheme deposit protection.

This means savers could be eligible for compensation from the scheme up to £85,000 per person if RBS wasn’t able to return the capital invested to savers.

Head of savings and investments at Fair Investment Company Oliver Roylance-Smith said: “The new deposit plan from Meteor is one of the most competitive available for investors, offering the potential for a return over and above the rate of inflation.

“This potential return also sits alongside the capital protection offered by a structured deposit, allowing investors the opportunity for high returns with limited risk to their capital.”

Inflation beating

The latest figures from the Office for National Statistics put the Consumer Prices Index, the official measure for inflation, at 4.50 per cent.

With the returns on savings and investments depressed by the low Bank Rate of 0.50 per cent, many savers are faced with a tough decision, either lose money in a savings account, or take more. This plan bridges this gap by offering capital protection and the potential for returns well above inflation.

While inflation affects people differently depending on the amounts they spend on different goods or services, many investors are sensitive to price increases, particular those looking for a level of income.

Although the potential return on the Meteor plan is a competitive 7.50 per cent this is not guaranteed and there is the possibility that over the six year term this income payment may not be met.

The plan is open for direct ISA and non-ISA investments until 20 July 2011; there is an earlier deadline for ISA transfers. Click on the link in the table below for more information.

For more information about the Meteor FTSE Income Deposit Plan and to apply click here »

This is a structured deposit plan and is capital protected. There is a risk that the company backing the plan or any company associated with the plan may be unable to repay your initial investment and any returns stated. In this event you may be entitled to compensation from the Financial Services Compensation Scheme (FSCS), depending on your individual circumstances. In addition, you may not get back the full amount of your initial investment if the plan is not held for the full term.

© Fair Investment Company Ltd