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Chelsea Building Society launches Chelsea 50:50 Balance Bond

Chelsea Building Society has launched the Chelsea 50:50 Balance Bond, which will split the customer's deposit in two, one half invested in a one-year fixed rate bond and the other half with returns linked to the performance of the FTSE-100 Index over a five year period.

The Chelsea 50:50 Balance Bond will put all the invested funds in a straightforward savings account. The new bond will be available to new investors to open between October 27, 2007 and November 24, 2007. Investors can invest up to a maximum limit of GBP1 million provided that the account holder’s total investment in this and any other accounts with Chelsea does not exceed GBP2 million.

If the FTSE falls or doesn’t move, the investor will get this half of their original investment back in full. If the market rises, then a percentage of the increase is added to the initial investment. The account can be opened with a balance of GBP1,000. An investor can close their account during the 14 day cooling off period following the date of account opening.

The new account will offer initial fixed rate of 5.75% pa gross, up to December 10, 2007, for deposits above GBP1,000. On December 10, 2007, the interest earned during this period will be added to the account balance and divided equally between the fixed rate and the guaranteed equity bond.

From December 10, 2007 until December 10, 2012, the return on 50% of the initial investment will be linked to the performance of the FTSE-100 Index. If the FTSE-100 doesn’t grow or falls over this period, the investor will receive this 50% of their original investment back in full plus the interest earned from the date they opened their account up to December 10, 2007.