HSBC launches new guaranteed capital account

HSBC is tapping into consumer appetite for low risk investments by offering the bank’s best ever income rates on the latest tranche of its Guaranteed Capital Account.

New investors can now enjoy rates that track Bank of England Base Rate plus up to 1.5 per cent for the term of their investment - with top end rates currently equivalent to a market leading 6.75 per cent gross (6.96 per cent AER).

The Guaranteed Capital Account is available for terms over 3.5 or six years and combines income and growth in one product. It guarantees that the initial investment will remain secure, making it ideal for cautious investors looking for better returns than cash on deposit, but without the risks associated with equity based investments.

Malcolm Prince, head of multi-tie investments at HSBC comments, “One of the most popular products in our recent Green January Sale was an investment product - proving that consumers continue to have an appetite to invest given the right deal.

“The HSBC Guaranteed Capital Account taps in to this mindset. Investors can reap the rewards of stock market growth while earning income on their investment at our best ever rates - safe in the knowledge that their initial capital will be safe.”

The minimum investment is £3,000 (maximum £999,999), which is split 50/50 to combine income earned on deposit with the growth potential of a leading stock market index.

Income Fifty

The ‘Income Fifty’ element is designed to generate income on 50 per cent of the initial investment. Investors can choose to receive income each month into a nominated bank account, or rolled up and paid on maturity.

The rate of interest payable is our best offer yet and will continually exceed Bank of England Base Rate by up to 1.5 per cent for the term of the investment.

Capital Growth Fifty

The ‘Capital Growth Fifty’ element is designed to provide the growth potential of a leading stock market index without the associated risks on the remaining 50 per cent of the initial investment. Providing no withdrawals have been made by maturity, the investor will receive back this part of the deposit plus 50 per cent of any growth in the FTSE 100 Index during the term of the investment. If there has been no growth the investor will still receive the deposit in full.

Investors can make withdrawals at anytime subject to a minimum of £250 and maintaining a minimum balance of £1,500. A Market Value Adjustment (MVA) will apply, which may be negative.