Legal & General increases guaranteed equity bond minimum return

Legal & General has raised the minimum return on the new products in its series of guaranteed equity bonds.

The new bonds – Three Year Capital Guaranteed Bond 3 and Six Year Capital Guaranteed Bond 3 are launched from Monday 9 July 2007 and will be available for investment for a limited eight week offer period to Friday 31 August 2007.

Three Year Capital Guaranteed Bond 3

This is a fixed term, three year, deposit investment. It guarantees the return of an investor’s original capital at the end of the fixed term and either 50 per cent of any growth of the FTSE 100 Index or a return of 10 per cent gross (3.23 per cent AER), whichever is the greater. There is no cap on the growth.

Six Year Capital Guaranteed Bond 3

This is a fixed term, six year, deposit investment. It guarantees the return of an investor’s original capital at the end of the fixed term and either 50 per cent of any growth of the FTSE 100 Index or a return of 27.5 per cent gross (4.13 per cent AER), whichever is the greater. There is no cap on the growth.

Legal & General’s Product Development Director, Jamie Vale said: “Legal & General is a major manufacturer of capital protection products and our expertise in managing investments and risks has helped us to create products over the years that are closely aligned to the needs of cautious investors. Our three year product will net ISA investors a guaranteed minimum return of £3,300 if they invest the maximum of £3,000. The maximum investment in the six year product provides ISA investors looking to maximise returns over the medium term with an extremely attractive minimum return of £3,825. Both the three year and six year product have the potential, when wrapped in an ISA, to have the return paid free of taxes.”

Jamie added: “Investor’s original capital is guaranteed and will be returned in full, even if the FTSE 100 Index falls, provided the investment is held for the full term. In the current volatile equity market environment the opportunity for cautious investors to receive a fixed minimum return, have the potential for extra growth should the stock market perform well and protect their capital from stock market falls should prove an attractive proposition. These guaranteed equity bonds demonstrate our commitment to help advisers grow their business profitably. ”

Investors with Tessa-only ISA and cash ISA holdings have the opportunity to transfer their investment to the Three Year or Six Year Capital Guaranteed Bond 3 products.

The minimum investment is £500. The maximum investment for mini cash ISAs is £3,000. There is no limit for Tessa-only ISA/cash ISA transfers and deposit investment.

The funds invested are placed with the deposit taker Cater Allen Limited (a member of the Abbey Group of companies) at the start of the investment. This investment does not take account of dividends that would be available through holding shares in the FTSE 100 Index directly.