View more on these topics

Northern Rock bond reaches issue 8

Northern Rock has introduced the eighth issue of fifty:fifty, a guaranteed equity bond and high interest account packaged within one product.

The guaranteed equity bond element tracks the performance of the FTSE 100 over a five-year period which ends on June 12, 2007. To calculate the returns, the closing level of the FTSE 100 index is recorded at the start of the term and an average is taken during the final year. Investors get 75 per cent of any increase in the index and are guaranteed the return of their original capital, whatever happens to the FTSE 100 index.

The high interest account is a one-year fixed-rate bond paying 10 per cent gross a year until June 1, 2003. Withdrawals are allowed during the fixed-rate period, but are subject to the loss of 60 days&#39 interest as a penalty.

The five-year term on the guaranteed equity bond element may be a more suitable time span to track an index than similar products such as Barclays guaranteed equity savings bond. This rival combination product has a three-year term on its guaranteed equity bond element that could expose investors to shorter-term volatility in share prices.

Comparing the high-interest account elements of the bonds, Northern Rock&#39s 10 per cent fixed rate over one year is generous compared to the 8 per cent from Barclays over one year. Like Northern Rock, Barclays also allows withdrawals from this element subject to 60 days&#39 loss of interest, but it imposes a £1,000 minimum withdrawal on investors, whereas Northern Rock specifies no minimum withdrawal.

Recommended

Warnock and Weaver leave Bankhall

Two longstanding directors are leaving Bankhall following Skandia&#39s acquisition of the IFA services provider. IFAengine managing director David Warnock is leaving Bankhall Group to pursue his career in another area of information technology, while Bankhall group compliance director Martyn Weaver also leaves.Skandia managing director Nick Poyntz-Wright says: “Both were founder members of the Bankhall business […]

&#39Adequacy rules may mean firms pulling out of markets&#39

The FSA proposals on capital adequacy for life offices could lead to providers pulling out of certain areas of the market and increase consolidation, warns the ABI.The FSA last week issued CP136, Individual Capital Adequacy Standards, which proposes moving from a one-sizefits-all approach to a risk-based system reflecting the type of business being written. The […]

A stirling performance

Watch out Schumacher, Gary Heath is back on the track and he won&#39t be letting anybody pass at the chequered flag.Impartial Group chairman Heath has made his return to motor racing after a 30-year lay-off, entering the Ginetta Cup in his Ginetta G20 car.Heath drove the 1,800cc car around the course at Pembury in Wales […]

Warnings of property crash

The housing market is in significant danger of crashing, according to leading economist Roger Bootle, a former adviser to the last Conservative Chancellor Kenneth Clarke.Capital Economics managing director Bootle warned last week&#39s Building Societies Association annual conference in Bournemouth that people&#39s earnings are not rising in line with house prices and that mortgage debt as […]

Trusts: Easier than you think?

Protection providers often extol the benefits of placing plans in trust. The advantages for clients are widely recognised and numerous – inheritance tax mitigation, avoiding probate delay, controlling claim proceeds, and so the long, familiar list continues. Yet, dismissed as unnecessary form-filling, or simply viewed as irrelevant in the context of a mortgage sale, less […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com