Barclays launches new Regular Income Bond
Barclays Wealth has launched a new Regular Income Bond, which offers investors a monthly income of 6% per annum equivalent for six years with capital repayment at maturity dependant on the performance of the FTSE 100. This new launch aims to offer investors a competitive rate, especially given the relatively low interest rates available in the market at present. The new Regular Income Bond is open to investment until 14th June 2012 and the minimum initial investment is £5,640. It is available within Stocks and Shares ISAs and as a pension investment only.
The 6% pa equivalent investment return for the new Regular Income Bond is paid in monthly instalments of 0.50%. If the minimum initial amount (£5,640) were invested in the new Regular Income Bond, the monthly return would be £28.20, and investors would receive £2,030 over the entire 6 year term.
Richard Henry, Director, Barclays, said: "We've seen the equity markets continuing to fluctuate in recent weeks and inter-bank interest rates at all time lows. At the same the need for income is as strong as ever and understandably many investors continue to seek regular defined income on their investments. The new Regular Income Bond does just this by offering investors a monthly return of 0.50% on their investment over a six year period."
The Regular Income Bond is designed for investors looking for a monthly income higher than that available from cash or some fixed rate bonds, and who are willing to accept the risks to their capital. It is important to note that repayment of initial capital at the end of the plan is subject to the performance of the FTSE 100 index during the term. If the FTSE index reaches a level of more than 50% below its initial index level at any point during the term, and at maturity is below the starting level, the capital repayment will be reduced by the percentage by which the index has fallen between the starting level and maturity. Otherwise, capital is repaid in full.
Henry continued "Although it is important to note that capital is at risk in this investment, investors are guaranteed a monthly return on their investment which is not reliant on the performance of the FTSE index."
The Regular Income Bond is a structured capital at risk product. Investors can sell before maturity but may get back less than they invested irrespective of the index's performance. The investment is subject to the counterparty risk of Barclays Bank PLC.