Legal & General Inflation Protected Deposit Bond Issue 1 (RPI based)

qpop

Hi guys

Wanted to let people know about this.

It seems to be aimed at intermediataries primarily, but it seems Northern Rock are selling it.

http://www.northernrock.co.uk/savings/find/savings-accounts/LG_Inflation_Protected_Deposit_Bond_1_%28ISA%29/

Account overview Legal & General Inflation Protected Deposit Bond 1 (ISA)

What is the Legal & General Inflation Protected Deposit Bond 1?

• Has a fixed term of five years
• Aims to provide a minimum return or if greater a return that matches inflation as measured by the Retail Prices Index
• Also offers the potential for growth
• Can also be held as a Deposit Plan

What will I get back?

The Legal & General Inflation Protected Deposit Bond 1 aims to pay back your original investment at the end of the five year term, plus the greater of:

• a 17.5% minimum return, OR
• 100% of any growth in the Retail Prices Index

The growth of the Retail Prices Index will be measured using the level of the index in November 2011 and the level of the index in November 2016. Learn more

3.27% AER or inflation (RPI) if higher.

5 year fixed term.

Pretty good deal by most accounts.

(minimum deposit £500)

Wrapped in an ISA and accepts ISA transfers in.

Important notes:

• We will measure the level of the RPI in November 2011, this is the starting level. We will then compare that to the level of the index in November 2016
• All growth will be treated as interest and will be tax-free3. This product is also available as a Deposit Plan – see Fixed Term product range
• You should be aware that this is a five year investment. If you were to cash in your investment before the end of the fixed term, 25 January 2017, you may get back less than you invested. This will depend on the current value as determined by The Royal Bank of Scotland plc, the deposit taker
• If the deposit taker, The Royal Bank of Scotland plc, was unable to pay your money back, you may lose some or all of your investment
• The Financial Services Compensation Scheme (FSCS) can pay compensation to depositors if The Royal Bank of Scotland plc is unable to meet its financial obligations. Please refer to the Key Features for more information
• The favourable tax situation of ISAs may not be maintained.

http://www.northernrock.co.uk/savings/pdf/LG_Inflation_Protected_Deposit_Bond_1_%28ISA%29-Key_Facts.pdf <-- Key Features.


Also, chances are your IFA has been given the docs by L&G, so would be worth having a word with them.

qpop

Please note this is judged under CASH ISA rules so max new money is your cash ISA limit (£5,340)

It is also purchaseable as a deposit account, and savings tax would then be applicable.

oldvicar

BM Savings offers a better rate at the moment (RPI+0.5% year on year) - better except if inflation runs at a low rate for most of the term, but anyone who thinks this is likely won't be interested in an RPI linked account anyway.

qpop

Good point, but the key is choice - particularly for those with £85k+ to save.