Possible "safe" investment

Seemed like a good deal to me until I read "The product is structured to return your original capital in full after 5 or 7 years but this is not guaranteed."

Maybe their just being straight - A rated insurers might fail, but it needs investigating as Guaranteed Equity Bonds (the stock market linked alternative that guarantees you capital) are allowed to use the guaranteed word.

Daytona

In message , Daytona writes

Thats because the Government guarantees GEBs and the FSA (for some reason) allow the Government to use the word and bans anybody else from doing so. I wonder why?

Keydata is OK but if your product does not have a guaranteed return of capital after the period then it's what's known as a precipice bond and a lot of people have lost a lot of money when these bonds matured after the stockmarket crash a few years ago. If you're happy with that possibility, then fine. But think about it.

Rob Graham

Because of the respective frequency of default ?

How often does the government default ?

How often does a 'strong' insurer default ?

Daytona

In message , Rob graham writes

Nobody except the Government can use the word 'guaranteed' in this scenario.

Only if the formula for the payout allows a return of capital lower than the original investment.

I think in this case there is at least a return of capital with a possible participation in an index. They just cant say that the return of capital is guaranteed because there is a chance the provider may go bust.

In message , Daytona writes

I was being sarcastic! It just enables the Government to attract more dosh into NatSav but we all know Govts can just change their minds about things at a whim.

I didn't know this government were into SatNav, that's the US!

Like whether to honour guarantees, you mean?

In message , Ronald Raygun writes

:-)Dont you mean SU?

I only meant that the Dept of NatSav is allowed to say its deposits are 'guaranteed', whether they are or not remains to be seen.