Chelsea Building Society has unveiled the fifth issue of the Chelsea portfolio extra fixed rate bond at the same time as its fourth issue.
This combination of a high interest account from Chelsea and a unit-linked bond from Norwich Union differs from the fourth issue in that it allows up to half of investors' capital to be placed in the high interest account. The fourth issue of the product limits this amount to up to 30 per cent of the total investment, but has a higher interest rate.
Investors in the fifth issue receive interest that is fixed at 5.50 per cent gross a year or 5.37 per cent gross a month on the high interest account element, while the fourth issue pays 6.00 per cent gross a year or 5.84 per cent gross a month. Withdrawals can be made during the fixed-rate period, but this is subject to a 150 days' interest as a penalty.
The unit-linked bond element of the product, the Norwich Union portfolio bond, provides access to a range of Norwich Union funds that cover different investment objectives and risk profiles. There are two with-profits funds, three managed funds, six ethical funds, a guaranteed fund and 17 other funds including the corporate bond fund, UK index tracking fund and Japanese equity fund.
Investors who put half into each element are paid a lower rate of interest on the high interest account element than they would get with the fourth issue and the Leeds and Holback platinum access bond product. The Leeds & Holbeck product offers 7 per cent a year or 6.75 per cent a month until January 1, 2003.
According to Standard & Poor's, the Norwich Union deposit fund is ranked 94 out of 182 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to December 3, 2001.