Lloyds TSB 3 year footsie bond

golfwidow

What is the opinion on a three year bond that guarantees full money back at the end, but with annual rewards based on the footsie index, capped at 7%?
So if the market goes up that is what you get as "interest", but if it goes down you lose nothing? All held in the Isle of Man.

gozomark

if it goes down, you lose the interest you could have earned, so you don't lose nothing - its a simple double or quits - 3.5% in a savings account, or either 0% or 7% in this product

Reaper

From a protection point of view I don't like Isle of Man based products. In theory there is compensation available there but in practice there is a yearly cap so it may be a long time before you got your money back if a big bank went under, if ever.

Here is The Times taking a dim view of Barclays basing similar schemes in the Isle of Man:
http://www.timesonline.co.uk/tol/comment/columnists/article5732021.ece

In practice the government may not let them go under but be aware they may feel no compulsion to include schemes based offshore in any future rescue.

dunstonh

What is the participation rate? 100% or higher or lower. e.g. 100% of FTSE100 growth

Typically plans offered by the bank are pretty useless. They have a captive market who cant tell good from bad so they rarely have to issue good because they can get away with bad.

Use of offshore wrapper may not be ideal for some people.