Chelsea launches Guaranteed Equity Bond

On Saturday 10 February Chelsea Building Society will launch a Guaranteed Equity Bond (GEB).

The first issue of the Chelsea Guaranteed Equity Bond will be a straightforward Equity Participation GEB, where 115% of any rise in the FTSE-100 Index over the GEB Term which is a 5 year period, will be paid to the customer, plus any interest accrued during the period between opening and the GEB Start Date.

Offer period

The Chelsea Guaranteed Equity Bond (Issue 1) will be available to new investors to open between 10 February 2007 and 31 March 2007. During this period, investors may open a new GEB and invest up to the maximum limit. The maximum investment in this account is £1 million provided that the account holder’s total investment in this and any other accounts with Chelsea does not exceed £1 million.

Interest rates

From the date the investor opens their account, up to 24 April 2007 (this is the date that the first reading of the FTSE-100 Index will be taken and the GEB will start), investors will earn the following fixed rate:

Investment balance: £1,000 plus
AER: 3.58%

Annual rate
Gross pa: 3.85%
Net pa: 3.08%

On the GEB Start Date (24 April 2007), the interest earned during this period will be added to the account balance and will be included in GEB.

After the GEB Start Date, investors will receive a certificate outlining their investment and the opening level of the FTSE-100 index.

GEB Maturity Date

This is a 5 year investment, starting on the GEB Start Date (24 April 2007) and finishing on the GEB Maturity Date (24 April 2012).

Equity participation

Any growth in the FTSE-100 Index between the GEB Start Date and the GEB Maturity Date will be multiplied by 115%, this will be the investor’s return on investment.

Minimum investment

The minimum opening and interest earning balance is £1,000.

Withdrawals

Withdrawals may be made during the 14 day cooling off period following the date of account opening.

After this period, withdrawals are not permitted (other than in the case of death) until 7 days after the GEB Maturity Date.

Payment of interest

The interest earned between the account opening date and the GEB Start Date will be added to the account on 24 April 2007. The next interest payment date will be within 7 working days after the GEB Maturity Date.