Nationwide launches new guaranteed equity bond

With effect from Monday 13 August 2007, Nationwide is to launch a new tranche of its Guaranteed Equity Bond (GEB) with improved terms.

The GEB is particularly likely to appeal to would-be investors who are concerned about investing in stocks and shares following recent stock market volatility.

The five year bond guarantees to return the original investment, plus 10% or up to an increased 70% of any growth, whichever is greater, in the value of the FTSE 100, Nikkei 225 and DJEuroSTOXX 50 indicies. As returns are paid net of tax, 70% growth is equivalent to 87% before tax for basic and higher rate tax payers.

Nationwide has also increased its bonus for customers who invest early in the GEB. The bonus increases any investment made between 13 August 2007 and 29 September 2007 by up to 0.85%.

Nationwide’s previous issue of its GEB, offering up to 65% of any growth in the indicies, and a bonus of up to 0.80% for early investors, will be closed to new business on Saturday 11 August 2007.

Robin Bailey, Nationwide’s investments director, said: “Despite recent volatility, the stock market has been a good place to be over the last five years. People who are wary about investing will find that Guaranteed Equity Bonds give them the best of both worlds – the benefit of potential stock market growth without putting their capital at risk.

“With Nationwide’s new GEB, investors can now benefit from up to 70% of any potential stock market index growth based on the performance of some of the world’s top companies which are listed on the stock markets of the UK, Europe and Japan. And, with a minimum return of 10% guaranteed over the five year term, investors will always get back more than they put in.”