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Julian Gibbs

With more than £21bn

in Tessa funds maturing this year, the Tessa-only Isa market has become

huge. But it is unlikely

that investors will get

more than 5 per cent

on average from variable-rate Toisas.

A much better alternative for most investors

is a very popular product called Tessa Triple Plus issued by NDF in asso-

ciation with Credit Suisse First Boston. Many IFAs have quite rightly

recommended it to their clients.

NDF and CSFB are now issuing a new tranche on terms which were agreed

before the base rate cut on May 10. It is linked to the FTSE 100 index and

pays up to 20 per cent growth in any

one year over a five-year period so there is a potential for 100 per

cent tax-free growth.

Unlike most stockmarket-linked plans, it provides 100 per cent capital

security at all times.

With nearly all forecasters expecting the FTSE 100 to rise by at least 10

per cent from current levels, with some predicting gains of 20 per cent or

more over the next 12 months, this looks to be an extremely sensible

investment at current levels.

Two other points worth noting are that, in addition to the investor&#39s

maturing Tessa capital of £9,000 being invested, another £3,000 can be

invested in a mini cash Isa. Also, even if investors have already

transferred their existing Tessa into a Toisa, they can transfer at any

time into Triple Plus.

At present, the highest fixed-rate Isa available is only 6.1 per cent from

Northern Rock Building Society while the highest variable-rate Tessa is 6.5

per cent from Portman Building Society. I expect both rates to fall

shortly.

With no risk to capital and a far higher potential return than

conventional Toisas, Tessa Triple Plus

is a must for all realistic investors and even for those who are

risk-averse. Three per cent commission is paid to IFAs.

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