NFU Mutual launches 5% income bond

10 May 2011

Insurance specialist NFU Mutual has launched a six-year investment bond with a guaranteed annual income of 5%.

The FTSE 100-linked structured product is open to applications until the 24 June, or earlier if fully subscribed.

A £50,000 investment would generate an income of £2,500 a year, payable in quarterly installments of £625.

In addition, investors who subscribe before 5 June benefit from an extra 0.25% bonus, while investors with more than £150,000 will benefit from an enhancement of 0.5%. This rises to 1% if investors subscribe £250,000 or more.

However, while the annual income is guaranteed, the original investment isn't as the bond is linked to the performance of the FTSE 100.

If the index drops by more than 49% over the six-year term, the original capital won't be guaranteed.

Reliable returns

Chris Linpow, personal finance specialist at NFU Mutual, says: "It's especially difficult at the moment for people to find a reliable return on their money. But this new bond will provide our customers with a guaranteed quarterly income from their investment."

He highlights that these types of structured investments are not suitable for every investor, as they must be prepared to take risk with their money, hence the bond is only available through NFU Mutual consultants.

The counterparty is NFU Mutual.

 This article was written for Money Observer

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