High Interest Investment Plan: over 6% per year, even if the FTSE falls up to 20%

Written by Editorial Team
Last updated: 10th August 2020

Quarterly interest even if the FTSE falls…

High interest if the stock market goes up, stays the same, or even goes down by 20%.

If that sounds appealing, then the latest issue of our best selling income plan might be worth a closer look.

The plan will pay 1.525% at the end of each quarter, provided the FTSE 100 Index has not fallen by more than 20% below its value at the start of the plan – that’s a potential 6.1% per year interest, even if the FTSE falls up to 20%. If the Index does close below this level, no income is paid for that quarter.

The plan has a maximum term of 10 years, but also offers the opportunity to receive your initial capital back in full before then if the FTSE has risen 5% or more at the end of each quarter (from year 2 onwards). If the plan does not end early, your initial capital is returned in full provided the FTSE has not fallen by more than 35% at the end of the plan term. If it has, your initial investment will be reduced by 1% for each 1% fall, so your capital is at risk.

At a time of record low interest rates, the ability to receive over 6% per year, even if the stock market falls up to 20%, might be appealing to wide range of investors.”

Oliver Roylance-Smith, head of savings and investment

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Capital is at risk. This is a structured investment plan that is not capital protected and is not covered by the Financial Services Compensation Scheme (FSCS) for default alone. Income payments are not guaranteed and there is a risk of losing some or all of your initial investment due to the performance of the FTSE 100 Index.

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 addition, you may not get back the full amount of your initial investment if the plan is not held for the full term. The past performance of the FTSE 100 Index is not a guide to its future performance.

Tax treatment of ISAs depends on your individual circumstances and legislation which are subject to change in the future. ISA transfer charges may apply, please check with your provider.

Fair Investment Company does not offer advice and any investment transacted through us is on a non-advised basis. If you are at all unsure of the suitability of this type of investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.