West Bromwich Building Society has teamed up with Norwich Union to offer the combined portfolio plus bond.
This combination bond consists of a one-year fixed-rate bond from West Bromwich Building Society and a unit-linked bond from Norwich Union.
Investors with at least £10,000 must put 30 per cent of their capital into the West Bromwich guaranteed growth bond and 70 per cent of their capital into the Norwich Union portfolio bond.
The fixed-rate bond element has an interest rate of 8.5 per cent, which is fixed until July 31, 2003. The unit-linked bond element offers a range of 29 internal funds, including two with-profits funds, six socially responsible funds, a guaranteed fund and 20 equity funds such as the corporate bond and UK equity funds. Investors can choose up to six funds at any one time.
One benefit of investing in a combined product is that investors get a higher interest rate from the fixed-rate bond element than they would otherwise get by investing in a normal one-year fixed-rate bond. Also, with the unit-linked bond element, they can tailor the fund to their risk profile without having to invest all their capital in the bond.
Norwich & Peterboroughs portfolio bonus bond is a similar product that consists of a one-year fixed-rate bond and the Norwich Union portfolio bond. The only difference between the West Bromwich product and the Norwich & Peterborough product is the interest rate tiers on the fixed-rate bonds.
Both bonds pay 8.25 per cent gross to investors with £25,000 and over, but on the other tiers, the West Bromwich product pays interest of 0.25 per cent higher than the Norwich & Peterborough product.