Northern Rock has launched a further postal savings guaranteed capital bond with an income of 8% gro...
Northern Rock has launched a further postal savings guaranteed capital bond with an income of 8% gross over a three or five-year period.
Guaranteed Capital Bond - Issue II also provides growth options of 24% over three years and 40% over five years.
The offer period lasts until 31 August and the bond begins its life on 1 September. Minimum investment is £2,500. The bond is linked to the FTSE 100. While return of original capital invested is guaranteed, growth or income returns depend on the performance of the index.
Provided there is no fall in the FTSE 100, from its starting level on 1 September, the full interest will be paid on specific dates. If the index is lower on the specified dates, no interest will be paid. In this way, investors can earn interest in some, none or all of the years of the term chosen.
The dates are 1 September 2000, 3 September 2001, 2 September 2002, 1 September 2003 and 1 September 2004.
Growth investors can choose the three-year option or the five-year option. However, if the index has not risen from the start level in all the individual years in either the three-year or five-year period, the growth option will not be paid.
The bond will pay interest of 7% gross during the offer period until the funds are invested in the bond on 1 September. Interest earned in that period will be paid on 30 September 1999.
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First mentioned in Cridland Report
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