Customers afraid of risk are driving a boom in demand for bonds, according to Alliance & Leicester.
It is launching a five year bond linked to FTSE 100 where initial investments will be returned after five years regardless of stockmarket fluctuations. The maximum value on maturity will be 140 per cent of the initial investment.
A&L investment product manager Robert Sherman says: “The customer's desire to avoid risk with their investment is fuelling demand for guaranteed investment bonds. We have experienced a huge demand for them over the last few months.”