Leeds Option Bonds

Milarky

Not sure if this is suitable for many people... the rates up to 9% available are what caught my eye. But for that you have to put at least £75,000 with Norwich Union (£30,000 to get a less eye watering 7%)

http://www.leedsbuildingsociety.co.uk/savings/options_investment_plan.html

Any thought from 'real' investors? Is this just a sprat to catch a mackeral?

tom188

Generally these are a con with the high interest rate subsidised by the commission from NU.

You will do better elsewhere.

dunstonh

As tom says, they are not a good idea. I can arrange that bond with around 106-108% allocation on NMA terms and Leeds are offering it with zero allocation. Even a full commission IFA would offer around 103-104%.

Plus, the bond is taxed and an ISA would be better value. Larger amounts are better off going in the full retail NU Bond with the higher allocations if the bond is appropriate to them. Otherwise unit trust/oeics would be better.

So, if you want a 60/40% split like that, you are better picking an IFA for the investment side and a decent savings account for the savings side.