Take advantage of the FTSE 100 with no risk to your capital.
What matters to you when it comes to an investment? The reassurance of knowing your capital is guaranteed whatever happens?
If you like the idea of a return linked to FTSE 100 growth, but are concerned by
the unpredictability of the markets, our Guaranteed Double Asset Bond may offer
you a solution.
In simple terms, it’s a building society account, so your capital is guaranteed
- enabling you to invest risk-free. However, you could benefit from a return linked
to the growth in the FTSE 100.
What is the FTSE 100 Index?
The FTSE 100 Index is a benchmark index, tracking the performance of the London Stock Exchange. The full name is the Financial Times Stock Exchange 100, but it is commonly called the Footsie. The FTSE 100 Index comprises the 100 largest companies trading on the Exchange.
As your money is not invested directly in the companies that make up the FTSE 100 index, you do not receive a dividend income. The potential return of this element of the bond is linked to the performance of the index as a whole. Whilst the potential return is lower when compared to a direct stock market investment, your capital is guaranteed. There is no guarantee that you would receive your original investment back with a direct stock market investment.
How the bond works – a simple guide
Investment requirements
Minimum investment: £3,000, by cheque or transfer
- £1,000 in the 1 Year Fixed Rate Bond
- £2,000 in the Index Linked Bond
Maximum investment: £250,000 through Skipton Financial Services Ltd or £25,000 through your local branch.
Our bonds in detail
As the name suggests, our Guaranteed Double Asset Bond is split into two parts. When you initially invest into this product a fixed rate of 2.00% gross pa/AER will apply until midnight 16 March 2009. Then your capital plus any interest will be invested as detailed in the following two sections.
1 - The 1 Year Fixed Rate Bond
One third of your capital is invested into a 1 Year Fixed Rate Bond with a guaranteed interest rate of 5.50% gross pa/AER, for 12 months, which will be added to your bond at maturity.
Start Date:
16 March 2009
Maturity Date:
Midnight 16 March 2010 - We'll drop you a note to remind you.
For added flexibility during the one year term, you can withdraw up to 50% of your initial investment from the 1 Year Fixed Rate Bond, should the need arise. However, once you make a withdrawal, please remember that funds cannot be replaced.
2 - The Index Linked Bond - FTSE
Two thirds of your capital is invested into an Index Linked Bond, which offers a return of 100% of any positive growth dependent on the performance of the FTSE 100 Index over a five and half year period. Please note that the maximum growth you
can receive on your investment is 40%.
- The initial reading is the closing level of the FTSE 100 Index on 16 March 2009
- The final growth value will be based on the average of the readings from and including 16 September 2013, up to and including 15 September 2014.
The effect of averaging may affect the final level of the Index used to calculate
the benefits. The final reading is compared to the initial reading and you will
receive 100% return of any positive growth of the FTSE 100 Index.
Maturity date:
Midnight 17 September 2014 - We’ll drop you a note to remind you.
Index Linked Bond – further information
The Index Linked Bond will mature at midnight on 17 September 2014. Following the final readings, we require further time to calculate any growth in the FTSE 100 Index. During these last few days, no growth will accrue and there will be no interest payable.
In the event that the Index performs badly and there is no growth, or there is a reduction in the overall value of the Index, on maturity you will receive your original capital, plus the interest earned up to 16 March 2009.
Due to the nature of our Index Linked Bond, we don’t allow withdrawals before the bond matures.
What will happen when my investment matures?
As the Guaranteed Double Asset Bond has the two elements there are two maturity dates to make a note of:
- The 1 Year Fixed Rate Bond matures at midnight, 16 March 2010.
- The Index Linked Bonds mature at midnight, 17 September 2014.
To make life easier, your funds (minus any withdrawals you have made), plus the interest you have earned will be automatically transferred into a variable rate access account – giving you time to plan your next move. We’ll also send you details of other products you may be interested in.
With the index linked bond, you will have access to your capital and any return, no later than 14 days after the maturity date. During this time we calculate any interest payment and your investment earns a variable rate of interest equivalent to that of the Maturity Account (or equivalent account applicable at that time). We’ll send you full details of this account shortly before each maturity date.
Frequently asked questions
Who is Skipton Financial Services Limited?
Skipton Financial Services Limited is a wholly owned subsidiary of Skipton Building Society. They can offer fee free, financial advice on a whole range of financial products across the marketplace and advisers are on hand in every branch to find the best products for you to suit your individual needs.
When will my funds be transferred into the Guaranteed Double Asset Bond?
Your funds will be transferred into the bond on 16 March 2009. Until this date you’ll receive an attractive fixed interest rate of 2.00% gross pa/AER on your investment.
Can I top up my bond?
You can make additional investments into your bond up until the close of business 2 March 2009, or until the bond becomes closed to new customers, whichever comes first.
Can I withdraw my investment before the maturity date?
You may withdraw up to 50% of your initial investment from the 1 Year Fixed Rate Bond element during the one year term. For the Index Linked Bond no withdrawals are allowed prior to maturity.
Is my capital at risk?
No, your capital is guaranteed and will be returned to you when your bond matures.
What about Capital Gains Tax?
Although the return from both elements of the bond is subject to Income Tax, it is free from Capital Gains Tax.
Will I receive annual statements or passbooks?
No. However, within 14 days of 16 March 2009, we’ll send you a Certificate of Investment confirming your total investment as at 16 March 2009, including interest earned at the fixed rate of 2.00% gross pa/AER. Please keep this in a safe place.
Something to remember
At Skipton, we continually monitor the market to make sure we offer great rates of interest. However, things can change quickly – and sometimes we have to stop offering products sooner than we expected. That’s why we recommend that if you’re interested in a particular product, you act as soon as you can.
Click here to read the Further Terms and Conditions for this account
†Monday to Thursday: 8am - 8pm, Friday: 8am - 5:30pm, Saturday: 9am - 12pm