Nationwide unveils stock market bond

Monday, 30 November 2009 12:00

Nationwide Building Society is offering investors the chance to earn a guaranteed minimum return of 12 per cent gross after six years with its latest bond.

The Legal & General Guaranteed Equity Bond (GEB), being distributed via the building society, offers the equivalent of 1.9 per cent AER as a minimum but has the potential if to earn up to 6.99 per cent AER.

That is because the bond, now in its 13th issues, is linked to the growth of the stock market and could earn investors up to 50 per cent of any rise over the six-year period.

And customers investing in the GEB also have the opportunity to take out a one-year fixed-rate Guaranteed Savings Bond (GSB) which offers up to 4.35 per cent interest.

Robin Bailey, Nationwide's director for investments and savings, said GEBs had the potential for stock market-linked growth but did not have the same risk of capital loss associated with direct investment in stocks and shares.

He added: "For example, so long as the original investment amount is held for the full six years with no withdrawals, Issue 13 of the GEB provides a minimum return of 12 per cent gross.

"In addition, if the stock markets do well you could get much more than that, receiving 100 per cent of any growth, subject to final year averaging and up to a maximum return of 50 per cent of your original investment amount."

It is available as a deposit plan and a cash ISA. A minimum investment of £3,000 is required for the deposit plan or £3,600 for the ISA.

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