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Scottish Life International times it right for Tessas

Scottish Life International has timed the introduction its latest income and growth bonus bond to coincide with the maturity dates of Tessas (tax-exempt special savings.

Annual income can be taken at 11.2 per cent and quarterly income at 2.7 per cent. The growth alternative is fixed at 35.6 per cent, which is paid at the end of the three year term.

The bond is linked to three stockmarket indices -the FTSE 100, the S&P 500 and the EuroStoxx 50. Investors will get all of their original capital back after three years if none of the indices fall by more than 30 per cent. Even if one or more indices fall by more than 30 per cent during the term, investors will get their capital returned, if the indices have recovered by the end of the term.

Apart from Tessa investors, the bond might appeal to those who have used up their individual savings account allowances but who still need a tax-efficient savings vehicle. However, they must be prepared for the possibility of capital erosion if one or more indices fall do not recover by the end of the term.

The FTSE 100 rose from 4275.79 points on January 31, 1997 to 6297.53 points on January 31, 2000.

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