Nationwide offers issue 13 L&G Guaranteed Equity Bond

From Monday 30 November 2009, Nationwide Building Society will offer Issue 13 of the Legal & General (L&G) Capital Guaranteed Multi-Index Equity Bond (GEB).  Issue 13 of the GEB guarantees a minimum return on the investment of 12% gross at the end of six years, equivalent to 1.90% AER.  Subject to final year averaging, there is also the potential for further stock market linked growth of up to 50% when held for the full six years, equivalent to up to 6.99% AER.

Guaranteed Combination Plan

Customers who invest in Issue 13 of the GEB also have the opportunity to take out a new one year fixed rate Guaranteed Savings Bond (GSB) paying up to 4.25% gross p.a./AER based on the annual interest rate and a balance of £10,000 at any Nationwide branch.  The Guaranteed Combination Plan comprises the GEB and GSB together and so this could help savers make the most of their money in the current low interest rate environment.

ISA

Issue 13 of the GEB is available as both a deposit plan and as a cash ISA.  People aged 50 or over on, or before, 5 April 2010, are entitled to an increased overall annual ISA allowance limit of £10,200.  £5,100 of this can be invested in a cash ISA and the remaining amount in a stocks and shares ISA. Alternatively, the full amount can be invested in a stocks and shares ISA.  Within the ISA, customers can also transfer their previous year's allowances without it counting towards their current year allowance.

Robin Bailey, Nationwide's director for investments and savings, said: "For those who are looking for potentially higher returns on their savings and investments, a GEB could be an option.  This is because, although GEBs have the potential for stock market linked growth, they do not possess the same risk of capital loss that is sometimes associated with direct stocks and shares investments.  For example, so long as the original investment amount is held for the full six years with no withdrawals, Issue 13 of the GEB provides a minimum return of 12% gross. In addition, if the stock markets do well you could get much more than that, receiving 100% of any growth, subject to final year averaging and up to a maximum return of 50% of your original investment amount." 

"So if you do not need access to your funds during the six year term and want to see your savings potentially grow with stock market linked investments without risking capital, a GEB could be an attractive investment."

The offer period of Issue 13 of the Guaranteed Equity Bond is between 30 November 2009 and 23 January 2010, but could close earlier if fully subscribed.  The rates for the Guaranteed Savings Bond are effective from 30 November 2009 and are subject to change and may be withdrawn without notice.