Issue 1 offers a minimum return on the investment of 7.00% gross at the end of six years, equivalent to 1.13% AER. Subject to final year averaging, there is also the potential for further stock market linked growth of up to 50% of the original investment when held for the full six years. If the maximum potential return is achieved this is the equivalent to 6.99% AER.
Combination Savings Bond
Customers who invest in Issue 1 of the Stock Market Linked Savings Bond also have the opportunity to take out:
- One year fixed rate Combination Savings Bond (CSB) paying up to 4.25% gross p.a./AER, based on the annual interest rate and a balance of £10,000 or more.
The Combination Savings Bond, which can be opened from any Nationwide branch, is exclusively available for customers who invest in the six year Stock Market Linked Savings Bond and could help savers make the most of their money in the current low interest rate environment.
ISA
Issue 1 of the Stock Market Linked Savings Bond 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.
For those under 50 on, or before 5 April 2010, the annual ISA allowance limit is £7,200, of which £3,600 can be invested in a cash ISA and the remaining amount in a stocks and shares ISA. Alternatively, the full annual allowance can be invested in a stocks and shares ISA. Within the ISA, customers can also transfer their previous year’s cash ISA allowances without it counting towards their current year allowance.
Robin Bailey, Nationwide’s director for investments and savings, said:
“If you want to see potentially higher returns on your savings, but you do not like the idea of losing your capital if stock markets fall, then the Stock Market Linked Savings Bond could be the right account for you.
“Unlike some investments that are linked to the stock markets, the Stock Market Linked Savings Bond is designed to return your capital plus a minimum of 7% gross after six years, as well as a potential growth rate of up to 50% of your original investment if the stock markets do well.
“On top of this, we are also offering the new one year fixed rate Combination Savings Bond, which can only be opened at the same time as a Stock Market Linked Savings Bond. With an interest rate over eight times greater than the Bank of England Base Rate, the new Combination Savings Bond is another great reason to consider taking out the Stock Market Linked Savings Bond.”
