Norwich and Peterborough Building Society has unveiled the third issue of the portfolio bonus bond.
The bond combines a lump sum investment bond with an instant access savings account. It aims to provide investors with long-term capital growth and the option of income, plus easy access to part of their investment.
At least 80 per cent of the investment must go into Norwich Union's portfolio bond. It gives investors access to up to six funds from a range of 23. These include with-profits, global equity, equity ethical, corporate bond and property funds. There is also a guaranteed fund for more cautious investors, which guarantees the return of the original capital after five years.
The rest of the investment goes into Norwich & Peterborough's portfolio bonus account which pays interest of 8 per cent gross in the first year, including a 3 per cent bonus. Investors have instant access to this part of the bond and any withdrawals they make are penalty-free.
The bond could suit investors who are willing to tie up most of their money over the medium to long term but who need some of their investment to fall back on if they need money in an emergency. It is flexible enough to suit a range of risk profiles, from those who are looking for a capital guarantee to investors who want the excitement of Japan and South East Asia.
However, investors should be aware that the bond is not a capital protected product, even though it offers the option of a guaranteed fund.