Legal and General have launched the eighth version of their 6 Year Growth Deposit Bond in the continuing series of structured deposit plans.
The structured deposit plan is a fixed term, six year plan and offers the potential for a return linked to the performance of FTSE 100 Index plus capital protection.
The 6 Year Growth Deposit Bond offers a minimum return of 13.50 per cent over the six years (2.13 per cent AER).
If the average level of the FTSE 100 Index in the last 12 months of the plan is higher than the initial level then investors will receive 100 per cent of any capital growth in the FTS100, up to 50 per cent of their original investment. If the index falls during this period capital will be returned to investors, subject to the ability of the plan deposit taker, Royal Bank of Scotland, to repay investors.
Head of business development at Legal and General, James Harrington, said: “Last month, Bank of England Governor Mervyn King warned energy prices could push inflation up to 5 per cent by the end of the year. With the Consumer Prices Index likely to remain at or above its current level for some time we are experiencing continued demand for these deposit bonds”.
Harrington said Legal and General were seeing growth in the use of structured products as part of portfolio planning, with the potential for stock market linked growth and capital protection providing an attractive option.
The bond is open to investors from 20 June 2011 until 12 August 2011. Available as a cash ISA investment, the deadline for ISA transfers is 29 July 2011. The plan start date will be 31 August 2011. The minimum investment for the plan is £500.
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The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. Different types of investment carry different levels of risk and may not be suitable for all investors.
With structured deposits 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.
Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.
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