New Protected Equity Bond offered by Nationwide
Nationwide Building Society is launching a new six-year Protected Equity Bond, as well as new one and three year Combination Savings Bonds.
Protected Equity Bond
The Protected Equity Bond (PEB) is designed to return a customer's original investment at the end of the six-year period while, at the same time, offering a return linked to the performance of three of the world's leading stock market indices - the FTSE 100, EuroSTOXX and S&P 500.
Customers can receive 100% of any growth in the above-mentioned indices up to a maximum return of 55% gross (7.57% gross AER) on the original investment, subject to final year averaging.
The PEB may provide a solution for customers who would like stock market growth, but who do not like the risks of direct investment, as it does not invest directly in company shares or investment funds, therefore protecting the customer against overall falls in the stock markets at maturity. The new PEB is the Stock Market Linked Savings Bond 5 provided by Legal & General (L&G) and is available both as a deposit plan and cash ISA.
Combination Savings Bond
For customers who invest in the Protected Equity Bond, Nationwide is also offering access to an exclusive new one-year fixed rate Combination Savings Bond paying a top of market rate of up to 3.25% gross p.a./AER, and for the first time ever, a three-year option paying a top of market rate of up to 4.10% gross p.a./AER.
The Combination Savings Bond is a lump sum fixed term account with a fixed rate of interest, which is only available to customers who are investing in the a six-year Protected Equity Bond. The Protected Equity Bond and Combination Savings Bond must be opened at the same time, and customers must invest at least the same amount or more within the Protected Equity Bond. The minimum investment is £3,000.
Robin Bailey, Nationwide's divisional director for savings and investments said: "Our PEB could be the ideal option for customers who are thinking about investing in the stock markets, but are anxious about the risks of investing directly in company shares or investment funds. We've specifically designed it to protect the customer from any overall falls in the stock market at maturity. In addition, for those customers taking out our Protected Equity Bond, we're expanding our range of Combination Savings Bonds, offering a choice of one and three-year options, all of which provides further demonstration of our commitment to our savings customers."