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NS&I Guaranteed Equity Bond

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clerks6899
clerks6899 Posts: 14 Forumite
in Savings & investments
Hi was just wondering what opinions good or bad people had with this as an investment, they have just opened this for a limited time and usually only do this once a year. I havent got huge amounts to invest just £2000 and at least i would walk away with what i invested but surely the oportunity to earn a bit more is there lol...here's hoping.:confused:
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Comments

  • dunstonh
    dunstonh Posts: 119,697 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Rubbish product. It has guarantees but you pay for them in heavy implicit charges. Most GEBs over the last 5 years havent made a penny. Whilst true stockmarket investments in cautious funds have performed around 15% a year average in that same period, despite the crash.

    They are a cash cow for the providers.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • clerks6899
    clerks6899 Posts: 14 Forumite
    Thanks for advice no one likes a cash cow.....unless its their own.
  • dunstonh
    dunstonh Posts: 119,697 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Just for clarification, it tracks the FTSE100 index which has been a very poor index to follow. You dont get any dividends (they are used to pay the charges and cost of capital security - hence implicit charges). Dividends could account fo 20-25% of the return. A stockmarket crash would see a drop of around 20-25% historically which part covers the capital security cost plus dont expect them to invest it themselves in the FTSE100.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • cattie
    cattie Posts: 8,841 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    I had some cash invested with a Nationwide Equity Bond, it's been tied up for 6yrs & comes to end of term next month. All I'll get back is my original investment, which of course I'm pleased about as it's better than being completely out of pocket. I was told last year that it was unlikely I'd see any increase in the money I'd invested.

    But whereas over the past few years I'd lost out on stocks & share investments in a pep & tessa, these have at least recovered & increasing in price quite nicely. No such luck with the Equity Bond as it depends on 4 international indexes.

    I'd never go for one of these type of investments again. Far better to make your own choice of where to invest & not have your money tied up for so long when you know you won't make a penny.

    I wish this site had been around back then & I had people such as dustonh to give a warning on where it wasn't wise to put your hard earned cash.:o
    The bigger the bargain, the better I feel.

    I should mention that there's only one of me, don't confuse me with others of the same name.
  • Paul_Herring
    Paul_Herring Posts: 7,484 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    Just thought I'd bump this thread up since NS&I are starting to advertise thier "New NS&I Guaranteed Equity Bond" due to start on 14th March.

    Highlights as presented in their bumpf:
    NS&I wrote:
    Issue 12 of the NS&I Guaranteed Equity Bond - on sale from 14 March - offers a gross* return equal to 120% of any growth in the FTSE 100 index over a 5-year investment term.

    The minimum investment is £1,000 and there is no access during the investment term. The FTSE measures share prices only; it does not include dividends. And remember that inflation may reduce the true value of your money over time.

    * All returns will be liable to UK Income Tax on maturity of the Bond, but will be paid gross (ie with no tax deducted at source)
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • jordan_gibson
    jordan_gibson Posts: 258 Forumite
    Thank heavens for this board. Just received the same e-mail from them and it sounded good.....but obviously not.

    On a linked note. I have £8000 to invest for my Son. He is only 3 but I want it tied away for a few years so at 21 he will have a few quid to play around with.

    Does anyone have any immeadiate suggestions?
    You can't pick up your teeth with broken fingers!
  • Paul_Herring
    Paul_Herring Posts: 7,484 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    Does anyone have any immeadiate suggestions?
    Yes - avoid NS&I's GEB ;)

    On a more serious note, you're probably better off asking on a thread of your own with a more suitable subject :)
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • jordan_gibson
    jordan_gibson Posts: 258 Forumite
    cheers Paul - much appreciated
    You can't pick up your teeth with broken fingers!
  • Paul_Herring
    Paul_Herring Posts: 7,484 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    Another bump - they've mailed out about it again.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • ED
    ED Posts: 617 Forumite
    Timely mail-out (not), as it includes this wording :

    ''inflation may reduce the true value of your money over the 5-year term.''

    On the day an Inflation report announces a 0.30% rise to 3.1%!
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