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Media centre /
Press releaseBACK BY POPULAR DEMAND: THE NATIONAL SAVINGS AND INVESTMENTS GUARANTEED EQUITY BOND21 February 2003National Savings and Investments (NS&I) is to offer investors another opportunity to earn an attractive return linked to the stock market with no risk to their capital. The fourth issue of NS&I's successful five-year capital-secure Guaranteed Equity Bond will be on sale for a limited period from 26 February to 8 April, although it will close earlier if fully subscribed. Investors in this fourth issue of the NS&I Guaranteed Equity Bond will gain from any growth in the FTSE 100 index over the five year term, subject to a maximum of 60% gross, with the guarantee that their capital is 100% secure. The capital guarantee has proved extremely popular with investors and demand for the new Guaranteed Equity Bond is expected to be high. Following the success of the previous three issues, some 16,000 people have registered on NS&I's mailing list for advance information about Issue 4. Gill Cattanach, Commercial Director, National Savings and Investments said: 'Even though the UK stock market has fallen in recent times we believe that many investors continue to look to it for medium-term potential. 'Investors are looking for opportunities to earn a better return than can be found elsewhere, particularly following the Bank of England's recent quarter-percent rate cut. But, in an uncertain environment, investors are also keener than ever to ensure their capital is 100 per cent secure. 'After the success of our last three equity-linked bonds, we want to offer customers another opportunity to invest in a similar, equally secure and straightforward Bond, from a name they can trust. 'Our Guaranteed Equity Bond offers customers a chance to share in stock market growth over the next five years without risking a penny of their investment.' Facts about the NS&I Guaranteed Equity Bond Issue 4Issue 4 has a maximum potential return or 'cap' of 60% gross (i.e. before tax) and investors will receive all of the growth in the FTSE 100 index over the five year term up to a maximum of 60%. Other types of Guaranteed Equity Bonds on the market offer a 'participation' rate. Reduced participation bonds have no maximum limit on returns and pay a proportion of the growth in the FTSE 100 index. For example, if the FTSE 100 index were to grow by 60%, the National Savings and Investments Guaranteed Equity Bond would give a return of 60% gross, (i.e. 100% of 60%) whereas a Bond with a reduced participation of, for example, 70% would only give a return of 42% gross (i.e. 70% of 60% — see Appendix 1). For all growth levels in the FTSE 100 index up to 85%, the National Savings and Investments Guaranteed Equity Bond would pay a higher return than a Bond with a 70% participation rate. Appendix 2 illustrates the returns on both types of Bond, for a range of FTSE 100 index growth levels. Even if the FTSE 100 index were to fall over the five-year term, capital invested in the Issue 4 Guaranteed Equity Bond will be secure and returned to investors in full. Like all National Savings and Investments products, its Guaranteed Equity Bonds are backed by HM Treasury. The Bond is available for individuals aged 18 or over or trustees (including on behalf of children) to invest between £2,000 and £1 million (£2 million for joint investments), and is available from now until 8 April 2003, but is a limited issue so may close earlier if fully subscribed. During the six week offer period, investments will earn interest of 3.5% pa gross, paid at maturity. The five-year investment then starts on 9 April 2003 and the Bond matures on 9 April 2008. Investors can apply for the Bond over the phone by calling 0500 500 000 any time with their debit card details or by post by completing an application form available to download from the NS&I website at www.nsandi.com or from any one of 17,000 Post Office branches around the UK. Appendix 1 — Guaranteed Equity Bonds: 'capped' compared to 'participation'NS&I Issue 4 GEB compared to a typical 'participation' GEB
Appendix 2 — Guaranteed Equity Bonds: 'capped' compared to 'participation'NS&I GEB issue 4 compared to a typical reduced participation Bond
ENDS Notes to Editors
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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