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Northern Rock offers inflation protected deposit bond

10th December 2011 Print

Northern Rock has teamed up with its investment partner Legal & General to offer an innovative new savings plan designed to protect customers from inflation.

The five year structured deposit bond, Legal & General Inflation Protected Deposit Bond issue 1, offers savers a minimum return of 17.5% at maturity or, if greater, 100% of Retail Price Index (RPI) growth on their original investment.

Available for a limited period only, the product can be opened for a minimum deposit of £500 and is fixed until 25 January 2017. It can be opened via any Northern Rock branch as well as by phone and application forms can also be downloaded from the Northern Rock website.

Northern Rock’s Customer and Commercial Director Andy Tate said: “Inflation is a real concern to consumers who work hard for their money, and this product is designed to give our customers piece of mind about the growth of their capital, offering them protection from this risk.

“So regardless of what happens in the economy, savers will receive a guaranteed return on their investment.”

Legal & General's Head of Business Development James Harrington added: "The rate of inflation, as measured by RPI rose to 5.6% in September, which is its highest point since June 1991 (5.8%).

“Savers who invest in our inflation protected deposit bond will be assured to know that they receive three-way protection from inflation risk. First, their original capital will not be eroded by continued high inflation because their savings are linked to the RPI. Second, if the rate of inflation falls, they will receive a fixed minimum return of 17.5% at the end of the five year term, which offers investors the potential to beat inflation. And third, savers also have the peace of mind of knowing that the deposit bond aims to return their initial capital at maturity.”

This is a limited offer and Legal & General reserves the right to close the plan early without notice. If investors take out some or all of their money before the end of the fixed term they may get back substantially less than they originally invested.

The bond is available as a deposit plan, for new cash ISA applications (up to a maximum of £5,340) and for cash ISA transfers, for which there is no maximum balance. The last date for ISA transfers is 23 December 2011 to allow time for completion of the transfer before the offer close date. The closing date for all other applications is 6 January 2012.

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