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Media centre /
Press releaseFINANCIAL ADVISER BACKING FOR NEW WIN-WIN GUARANTEED EQUITY BOND03 June 2004Capital protection and a guaranteed minimum return from National Savings and Investments — regardless of FTSE performanceThe new Guaranteed Equity Bond from National Savings and Investments (NS&I), which offers a minimum gross return of 15% or 75% of any growth in the FTSE 100 index over the 5 year term, has been given the support of a leading financial adviser. Vivienne Starkey of independent financial adviser firm Equal Partners, London, says the Bond, which went on sale on 2 June, provides a combination of security with the reassurance that investors will receive a guaranteed minimum return if the FTSE performs poorly over the five-year term of the Bond. "People often confuse these bonds with structured products, probably because they are called Equity Bonds," says Starkey. "Guarantees are only as good as the institution giving them and in this case it is the Treasury, which is about as good as it gets. The strength of the guarantee can be very attractive to the cautious investor which explains their popularity. The capital is held on deposit and so there is no risk to the customer at all. "These Bonds appeal to those who are happier with cash, but willing to tie up part of their capital in order to benefit from a rise in the FTSE 100, without losing sleep if the market crashes. No product is ideal for everyone but these Bonds can be an important part in someone's overall financial planning." Investment and returns The NS&I Guaranteed Equity Bond (issue 8) is a five-year investment during which time there is no early exit option, the minimum investment is just £1,000 and returns are linked to any growth in the FTSE 100 over the term. Returns are subject to income tax at savings rates. If the FTSE only rises by up to 20% over the term, customers will receive a minimum guaranteed return of 15%, so £10,000 invested would give a minimum return of £1,500. If the FTSE rises by more than 20% over the term, investors will receive a gross return equal to 75% of that growth in the index. There is no cap on the upside, giving unlimited growth potential. NS&I's Guaranteed Equity Bond is purely a fixed term cash deposit with returns linked to the performance of the FTSE 100 index. None of the cash is invested directly into equities. Customers can buy GEB Issue 8 from NS&I by phone, using a debit card, on 0500 500 000 or by post. Application forms can be downloaded at www.nsandi.com and are available at Post Office branches. IFAs can find out more by calling NS&I on 0845 971 5401. 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. NS&I has GEB case studies available on request 3. In summary, the NS&I Guaranteed Equity Bond Issue 8 offers:
4. 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 NS&I media team5. For further information, digital images, or to arrange an interview call the NS&I media team.
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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