B'ham midshires 50:50 tracker

slopemaster

I was hunting for that mythical 8% deposit account and found this.

B'ham midshires 50:50 tracker
Half pays 9% fixed for one year.
Half is tied up for 5 years, and pays 95% of any rise in FTSE 100, and if it falls the capital is protected.

Theyre part of HBOS so wouldnt put more than 35 000 in it

Thoughts?

slopemaster

Main disadvantage I can see is I just phoned them and they said the second half is subject to income tax (notCGT) in the fifth yr, so that would be rather a big lump and prob not good for me - but mabbe OK for someone who thinks they will be nontaxpayer in 5 yrs time?

stevetodd

slopemaster wrote: »

I was hunting for that mythical 8% deposit account and found this.

B'ham midshires 50:50 tracker
Half pays 9% fixed for one year.
Half is tied up for 5 years, and pays 95% of any FTSE 100, and if it falls the capital is protected.

Theyre part of HBOS so wouldnt put more than 35 000 in it

Thoughts?

I looked at that last week but preferred the other 5 year deal they had, where they guarantee you 8.7% (compounded) for 5 years if the FTSE is higher at maturity (averaging rules apply). It starts first week of November so unless something happens to raise shares soon the starting point index is going to be low, hard to see the FTSE even lower in 5 years time. Someone pointed out a better product by Premier Asset Management, but I would worry about them being around in 5 years time (given the current economic climate). Whereas I have mortgages with BM so I would be safe.

dunstonh

They are using part of the commission from the rather poor quality GEB to improve the rate on the savings account. You are better off buying a decent GEB on discounted commission terms if that is what you really want and getting an unrelated savings account.

slopemaster

Ah. Yes, I suppose, logically, they must be.
(And the charges are not specified on the website)

agrima

Sounds Great. But with the FTSE doing the down thing at the moment is it that great???

slopemaster

I guess it depends if you think it will go up again within five yrs

stevetodd

agrima wrote: »

Sounds Great. But with the FTSE doing the down thing at the moment is it that great???

The BM 5 year GEB isa bond is the equivelant of the FSE being at 7405p (based on today closing price of 4880p), if it outperforms that fair enough (but I have plenty in the actual market so I wouldn't be crying) but if it only reaches say 6005p you get the equivelant of another 1,000 points.

I know better deals exist but not with companies that offer security such as BM (as I have mortgages with them) and they are covered by the FSA compensation scheme

dunstonh

agrima wrote: »

Sounds Great. But with the FTSE doing the down thing at the moment is it that great???

Best time to buy a GEB.