Zurich Guaranteed Capital Account 23

tiamaria

This account has been recomended to me by an IFA. It would mean tying up all I have for 5 years but that bit is OK.

I would just like some educated opinions on this account please as I've never invested in this sort of account before & I can't afford to take risks with all my cash.

I've read the blurb and the pros and cons and it seems a good investment, but could I be missing something?

Thanks

very Naive tiamaria

dunstonh

Not a fan on these plans. You get the odd decent one from time to time. At the moment the income ones seem more attractive than the growth ones.

This one is a five-and-a-half year plan that provides 100% capital protection alongside the potential to benefit rises in the FTSE 100.
Provided by Dunbar Bank, the Zurich Guaranteed Capital Account 23 offers 100% participation in the growth of the index, to a threshold of 80% after which interest is capped at 25%. The index is averaged monthly over the final 12 months to calculate the interest. While investors will therefore miss out on the full effect of any rise in the index in the days preceding the account's expiry date it also means investors are cushioned from the full effect of any falls.

So effectively, you are investing in a FTSE100 tracker with no dividends and averaging in the final 12 months and a potential cap. Those last two things are effectively paying for the guarantee (although technically you are never actually investing in the FTSE100).

I would be inclined to either take my own risks with a build-your-own GEB, look at the income versions (where 8% p.a. gross is possible as long as the FTSE doesnt halve in from the investment point to maturity) or wait for the likes of Premier or NDFA to come out with their next growth versions. There isnt a lot available on the Growth side at the moment. The funding seems to be on income with the usual providers appearing to target savers with fixed rates of 7% or 8% on the the GEBs with the hope that those getting 1-3% on savings will make the switch.

This one isnt bad as currrent GEBs go (when you consider that I dont like these anyway) but you have to look at future potential and take a risk on what you think is going to happen in the coming years. Another one has 150% participation linked to the growth of the FTSE 100 capped at 50% growth. Whilst the 50% cap looks ugly and a bit turn off, its quite possible it offers more potential than the the 100% capped at 80% depending on what your view of the FTSE100 is.

whiteflag_3

tiamaria wrote: »

This account has been recomended to me by an IFA. It would mean tying up all I have for 5 years but that bit is OK.

I would just like some educated opinions on this account please as I've never invested in this sort of account before & I can't afford to take risks with all my cash.

I've read the blurb and the pros and cons and it seems a good investment, but could I be missing something?

Thanks

very Naive tiamaria

how much are you putting in? bit alarming tying up "all you have"

do you have any other investments?

What is your attitude to risk?

Do you have a particular purpose for this money?

Middle_Sister

How will we know when Premier or NDFA come out with another growth product?

guli

lesleyfb wrote: »

How will we know when Premier or NDFA come out with another growth product?

Check their websites?