Derbyshire Building Society has established a combination product that consists of a high-interest account and a unit-linked bond.
The Derbyshire dual bond places 30 per cent of investors' capital into the high-interest account element, which is fixed at 7 per cent gross for one year. The remaining 70 per cent of capital will go into the Derbyshire portfolio plan, which is a branded version of Norwich Union's portfolio bond.
The bond offers four funds, Norwich Union with-profit, with-profit income, guaranteed and sustainable future managed, which can be tailored towards investors' objectives and the level of risk they are willing to take.
Other building societies such as Norwich & Peterborough also have combination products that use the Norwich Union portfolio bond. However, the Norwich & Peterborough product makes use of all 29 fund links on the underlying Norwich Union bond, so investors have more choice compared with the Derbyshire product.
The interest rates on the high interest account elements are also different. The high interest account element of Norwich & Peterborough's portfolio bonus bond has tiered interest rates that are fixed for one year. Investors with less than £10,000 would get a higher interest rate with the Derbyshire product compared with the 6.7 per cent gross they would get with Norwich & Peterborough.
However, investors with more than £10,000 would get between 7.2 per cent and 7.7 per cent with Norwich & Peterborough compared with the 7 per cent gross offered by the Derbyshire building society.