Barclays Private Clients International has created the fifth issue of its high interest index-linked deposit account (HI-ILDA).
HI-ILDA 5 is a combination of a guaranteed equity bond and a high-interest account. It is available in a choice of currency denominations – sterling and US dollars.
Half of sterling investments will go into a high-interest account, which is fixed at 7 per cent gross for 12 months. The remainder will go into a guaranteed equity bond that tracks the FTSE 100 index during a five-year term. A full capital return is guaranteed whatever happens to the FTSE 100 index and 60 per cent of any increase in the index during the term is also offered.
Investments in US dollars are split differently between the elements. Forty per cent goes into the high-interest account element, which pays 5 per cent gross for 12 months. The remainder will go into a guaranteed equity bond that is linked to the S&P 500 index for five years. Investors get a full capital return whatever happens and up to 50 per cent of any growth in the index.
This product is similar to Northern Rock Guernsey's offshore fifty:fifty, but the rival product is available only in sterling, while offshore investors may prefer other currencies.
The sterling version of the Barclays product offers the same interest rate on the high-interest account element as the Barclays product, but has no withdrawal penalties. Withdrawals with Northern Rock incur a penalty of 90 days' loss of interest.
However, on the guaranteed equity bond element, the Northern Rock product offers 70 per cent growth in the FTSE 100, which is 10 per cent higher than Barclays is offering.