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Media centre /
Press releaseNS&I LAUNCHES NEW WIN-WIN MINIMUM RETURN GUARANTEED EQUITY BOND27 May 2004Investors gain if stock market rises or falls with new 75% participation or 15% minimum return GEB from National Savings and InvestmentsNational Savings and Investments (NS&I) is launching a new variation of its Guaranteed Equity Bond, this time offering a guarantee that investors will gain whether the FTSE 100 index rises or falls, by offering a return equal to 75% of any growth in the index or a minimum return of 15% gross, whichever is the greater. As with NS&I's previous GEBs, returns are linked to the performance of the FTSE 100 index over the five-year term and investors' capital is completely secure. Offer period Issue 8 of the GEB goes on sale for a limited period of eight weeks from 2 June to 27 July 2004. It may close earlier if fully subscribed, so investors are encouraged to buy early, especially because their investment will earn interest at 3.50% p.a. gross during the eight week offer period, paid when the Bond matures. The minimum investment is just £1,000. Returns GEB Issue 8 offers:
This table provides examples of how NS&Icalculates the gross return on the GEB. Figures are calculated according to the start and end level of the FTSE 100 index over five years (averaged over the first five days and the last six months). If the FTSE 100 index falls or only rises by up to 20% over the five-year term, investors will receive the minimum return of 15%. A high street savings account would need to offer a gross annual compound interest rate of 2.83% to provide a return of 15% over five years. If the FTSE 100 index climbs by 20% or more over the five-year term, investors will receive a gross return equivalent to 75% of that growth, with no upper limit or cap on the return. Demand has been high for NS&I's previous issues - the first seven sold over £650 million since Issue one was launched in March 2002 - and more than 20,000 people have asked to be given advance information about Issue 8. NS&I's last GEB (Issue 7) was on sale between 24 March and 18 May 2004. How to buy NS&I's Guaranteed Equity Bond
NS&I Guaranteed Equity Bond key features
Gill Cattanach, National Savings and Investments marketing director, said: "This is an unmissable win-win investment for customers who want the opportunity to gain from growth in the FTSE, with the added advantage of receiving a guaranteed return on their capital should the FTSE drop. "With some recent fluctuations but an overall general rise in the FTSE 100 index, this Guaranteed Equity Bond provides the opportunity for some excellent returns, while providing the reassurance that, should the market fall, not only will you get your capital back, you'll also receive a guaranteed minimum return on your investment. Stock market growth After three years of falls the FTSE 100 index has risen from its five-year low of 3287.00 on 12 March 2003 and, to date, has recovered by 1117.70 points2. Why have investors purchased NS&IGuaranteed Equity Bonds? In just two years, NS&Ihas become an established provider for these investments. Customer research has found that the main reasons people invest in the NS&IGuaranteed Equity Bond are:
ENDS Notes to Editors1. NS&I's previous GEBs offered the following capped rates of return: GEB 1: 65%, GEB 2: 70%, GEB 3: 65%, GEB 4: 60%, GEB 5: 65%. GEB 6 offered a participation rate of 95% and GEB 7 offered 110% (investors receive 95% or 110% of any growth in the FTSE 100 index over the five-year term however high it goes). 2. Source: Ceefax. FTSE 100 index as at 25 May 2004: 4404.70 3. NS&Ihas GEB case studies available on request 4. In summary, the NS&IGuaranteed Equity Bond Issue 8 offers:
5. National Savings and Investments is one of the largest savings organisations in the UK which offers a range of savings and investments products. It has 30 million customers and £66 billion invested. All products offer 100% security, because they are backed by HM Treasury 6. Further information and digital images are available from the NS&IMedia Team 7. NS&Iis the exclusive sponsor of The Classical BRIT Awards, the UK's premier classical awards show, at the Royal Albert Hall on 26 May 2004. NS&I media teamFor further details please contact:
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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