Cater Allen has launched a five-year structured product which offers a potential annual income and full return of capital at maturity.
The Santander subsidiary is offering its Capital Guaranteed Income plan. It will pay 6.5% annually if the index level is higher than its starting level on the annual observation date.
The original investment will be returned at maturity.
Cater Allen Private Bank senior investment strategist Fernando Gasca says: "The potential rate of return from the plan is currently 3% higher than the expected dividend yield of the FTSE 100.
"With the FTSE at a comparatively low level against two years ago, investors have the chance to exploit this to their advantage."
The plan is open for investment until 26 March 2010, with a minimum investment of £7,200. It is available as a SIPP, SSAS or offshore bond but not an ISA with commission offered at 3%.
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