5 Year @ 2.25% per annum

IvanOpinion

MrStanners said:

Not sure why it says you "may" be entitled to compensation and also the "Circumstances vary" part. 

The use of 'may' seems to be quite standard.  The cynic in me says it is a legal get-out-of-jail-free clause if FSCS manages to find some loophole whereby they don't have to pay out or maybe pay out only a portion (e.g. 10p in the £1).  Another example might be where you hold 2 accounts with two separate banks but they are ultimately the same bank, if one held more than the compensation limit then the other may not pay out at all.

So they really can't say 'will', since there are/may be other factors in play.

kaMelo

The firm only has FSCS cover for insurance products and reading the key information document it states as much;

Objectives: The Unity Mutual Guaranteed Investment Bond (Series 4) is a life assurance policy which enables you to invest your money and provides you with capital protection and a guaranteed return of 2.25% per annum after five years.
The Unity Mutual Guaranteed Investment Bond aims to:
  allow you to invest a lump sum for five years or more.
 provide capital protection for your investment throughout the term.
 provide a guaranteed level of growth if you leave your policy invested for five years.
 provide a guaranteed payment if you die.

Where is the money invested: Your money is invested in our Unity Mutual Fund. We use this money to invest in asset classes that enable us to provide the policy benefits, such as return of your lump sum and guaranteed growth over the term of your investment.

Intended retail investor: The Guaranteed Investment Bond is available for tax purposes using a Stocks and Shares ISA route, or via a non-ISA path as a life assurance policy. For non-ISA investments it is possible to set it up using a joint life basis.

It would appear a life assurance product with guaranteed returns, documented up to and including five years. How they can guarantee anything whilst taking the risk of investment I'm not sure but guarantee it they do.

unkle

So as I thought then, not a bad proposition.

colsten

Wouldn't touch it with a bargepole.

Albermarle

It looks to me like a low risk ( but not no risk ) investment product but due to the bad experiences people have had with similar products in the past , probably best to get the bargepole out .
The best 5 year actual savings rate on offer is 1.6% ( sharia account so not 100% guaranteed ) or 1.45% with a more conventional bank. Anything offering more than this must entail some level of risk and the fact they are trying to hide this means alarm bells should be ringing.

unkle

colsten said:

Wouldn't touch it with a bargepole.

Why?

colsten

unkle said:

colsten said:

Wouldn't touch it with a bargepole.

Why?

@Albermarle explained it better than I could have done 

unkle

Fair enough, they must be lying/hiding something 

Stubod

...that bargepole seems to be doing the rounds again....please can I borrow it again for this one?...

If it looks too good ..etc...etc...

Reaper

This is an odd one. It appears investments with a life assurance element are indeed 100% covered by the FSCS with no upper limit. This allows the company to market them as if they are a savings account (which they aren't) because as far as the punter is concerned it is fixed rate savings with FSCS backing. Behind the scenes the company puts the money on the stock market to try and cover the fixed return it has promised. If they succeed the pay the investor. If they fail badly and can't cover the payments they go bust and the FSCS pays up.

It strikes me as something of a loophole and an abuse of the system which may get closed one day. I don't feel comfortable enough to invest but if others feel like it I can't really see anything to fear.