Skipton Building Society has joined the very small number of companies providing capital protected Isas, with the two-year growth mini cash Isa.
The Isa, has an unlimited term, tracks the FTSE 100 index for the first two years. It is aiming to grow by one per cent for every one per cent increase in the index, to a maximum of 20 per cent. The capital is guaranteed, so that even if the FTSE 100 falls beyond its starting point, the original investment will still be returned.
For the remaining period of its term, the Isa will have an interest rate that is yet to be determined.
Although the idea of the capital guarantee will appeal to many investors, the fact that growth is limited to 20 per cent will not. Many competing products allow for growth of between 50 and 75 per cent in the FTSE 100, and as a result the two-year growth mini Isa will not be as attractive.