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Lucky 13 from Northern Rock Guernsey

Northern Rock has introduced the 16th issue of fifty:fifty, a combination of a high interest account and a guaranteed equity bond.

The product is available to investors with at least £5,000 to invest. which must be split equally between the two elements.

The high interest account element of the product is a one-year fixed-rate bond paying 8 per cent gross a year until January 15, 2004. Withdrawals can be made subject to 60 days&#39 loss of interest.

The guaranteed equity bond element is linked to the FTSE 100 index for a five-year term and offers investors 70 per cent of any rise in the index. They are also guaranteed the return of their original capital, whatever happens to the FTSE 100 index.

To calculate the returns, the closing level of the index is measured on January 15, 2003. This is compared with the average closing level taken during the final year of the term.

This product could suit cautious investors who are looking for a moderate rate of income and capital growth. Bristol & West&#39s global income and growth bond is a similar combination product, but it has a longer term of seven years on both elements. The longer term could suit some investors, but other investors may be reluctant to lock in to the hig- interest account element for this long. because interest rates may go up in the meantime.

However, Northern Rock&#39s offering is linked to one index, while the Bristol & West product offers greater geographical diversity across four indices, with a higher return of 80 per cent growth in these indices. But the weaker indices to which this bond is linked, such as the Nikkei 225, could push the final return down.

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