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Yorkshire go for Tessa opportunity

Yorkshire Building Society has introduced the equity linked tax exempt special savings account (Tessa) only individual savings account (Isa), which is designed to accept investments from maturing Tessas.

Yorkshire has given the Isa a fixed rate of 6.2 per cent until March 31, 2001. After this period the Isa will be divided into two equal amounts, both of which will run until March 31, 2006.

The first half will have a fixed rate of eight per cent, while the second half will have a return of 60 per cent of the growth of the FTSE 100 index over the term. In the event that the FTSE 100 does not grow over this period the investor will get their original capital back.

This is an innovative product that should appeal to investors who have a Tessa that is about to mature and who now want to dip a cautious toe in the waters of the stockmarket.

Over a five year period the FTSE 100 rose from 3,576 points on December 19, 1995 to 6,295 points on December 19, 2000.

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