Chelsea Building Society has introduced the fourth edition of the Chelsea portfolio extra fixed rate bond, which combines a fixed-rate high interest account from Chelsea and a unit-linked bond from Norwich Union.
Investors with at least £10,000 invest up to 30 per cent of their capital in the high interest account and the rest is invested in the Norwich Union portfolio bond.
The high interest account element of the product pays interest at a fixed rate of 6 per cent a year or 5.84 per cent a month until January 2, 2003. Investors can make withdrawals during the fixed-rate period, but must lose 150 days' interest as a penalty.
The unit-linked bond element provides access to 29 fund links and investors can choose up to six at a time. The fund range includes guaranteed funds, ethical funds, with-profits funds, managed funds and equity funds with a geographical bias such as European equity and UK equity.
The product may appeal to investors who are keen to mix and match their investments through the unit-linked bond while having instant access to a small part of their capital in case of emergencies. However, this product offers nothing new as Leeds & Holbeck recently established the platinum access bond which also combines a high interest account with a Norwich Union bond offering the same fund links.
However, the high interest account element of the Leeds & Holbeck product has a higher interest rate of 7 per cent a year or 6.75 per cent a month until January 1, 2003. But the drawback compared to the Chelsea product is that only one emergency withdrawal is allowed during the fixed-rate period.