Allied Irish Bank is targeting building society savings account holders with its equity linked deposit account.
Investors are given a choice as to whether they want to make their investment in Euros or sterling. The decision they make will have a bearing on what index the investment will follow. Investments in sterling will be linked to the FTSE 100 and investments in Euros will be linked to the Dow Jones EuroStoxx 50.
The investment is capital protected so clients will at least get their original capital back at the end of the five-year term, no matter how the indices perform. If the level of the FTSE 100 rises between December 7, 2000 and December 7, 2005, investors will get 75 per cent of this growth. If the Dow Jones EuroStoxx 50 rises during the term, investors will get 60 per cent of this growth.
The deposit account is suitable for cautious investors who want to take the first steps towards a stockmarket investment. It is fairly competitive compared to some capital protected products which offer investors a lower percentage of growth.
As an offshore product it is unlikely to prove very popular with UK investors, but it could find a niche among foreign nationals living in the UK.
Over a five year period, the FTSE 100 index went up from 3529.116 points on October 31, 1995 to 6438.42 points on October 31, 2000.