IOM Bank Offers Index-Linked Savings Product

by Carla Johnson, Investors Offshore.com

26 April 2006

Derbyshire Offshore's new Secure Index Linked Saver account offer potential returns of up to 50% of any growth in the FTSE 100 index over a five year term, with a guarantee of 16.5% minimum return at maturity, and a guaranteed capital return.

Fiona Passey Director of Offshore Banking, Derbyshire Offshore commented, “Our new Secure Index Linked Saver account gives investors an exciting ringside seat enabling them to watch the stock markets perform, but with the peace of mind that their money will remain completely secure. This is a way for investors to “dip their toes” into the stock market with both the prospect of a capital guarantee and real capital growth. Following the research we carried out amongst our clients last year, we are now extending our product range to offer accounts which compliment and go beyond our core portfolio of deposits. Clients are telling us they want the potential of more return yet safety is important, so this product is designed to meet those twin needs.”

The Secure Index Linked Saver is a deposit account with Derbyshire Offshore that is linked to the performance of the FTSE 100 Index for a five-year period. The money is not invested directly in the stock market. The growth payable on the account at maturity will be the greater of 16.5% Gross and 50% of any percentage growth in the FTSE 100 Index over the five years, subject to averaging.

Fiona Passey continues, “We will be averaging the FTSE 100 at the start and end of the five year period which should reduce the impact of falls in the index during the first three months and the last six months of the period. The risk is that if the index rises in the first three months or last six months you don’t benefit as much from those increases.”

Investors can start saving from 1 May 2006 up to 31 May 2006, subject to availability. Fiona Passey adds, “What’s more, early bird investors will receive an early investment bonus of 0.5% on the amount deposited by 15 May and 0.25% on the amount deposited by 29 May. The bonus payments will be added to your original deposits so increasing the balance in your account at the start date.”

Starting date for the Secure Index Linked Saver account is 1 June 2006 and the account matures on 7 June 2011. Minimum investment £5,000.

With tax planning opportunities in mind, Derbyshire Offshore has also recently introduced a new Interest Accumulator account. Fiona Passey comments, “Our new Interest Accumulator account has been designed for those clients who are expecting changes to their UK taxation obligations at a future date. It offers clients control over the date at which interest is payable and therefore when any tax liability becomes due.

In a recent mini poll on the Derbyshire Offshore website, the majority of expat investors agreed with the statement that “as an expat it is getting more difficult to save each month”. Derbyshire Offshore asked the question as part of an ongoing research initiative in 2006 to better understand the views and concerns of expats, enabling them to develop products and services tailored to their needs.

Expat investors can point to a number of reasons that may have affected their view of offshore saving – namely the increased cost of living overseas; reduction in expat salaries and package benefits and the perceived view of the EU Savings Tax Directive, introduced last year.

The new Interest Accumulator account from Derbyshire Offshore has been designed with tax planning in mind. Interest is calculated and accrued daily, but is only paid on the day an account is closed – which can be anytime after two years from opening the account.

There are four tiers with variable interest rates up to 4.60% Gross/AER. Clients can open an Interest Accumulator account with just £10,000 and the account has a maximum balance of £2 million. Derbyshire Offshore asks clients to leave their funds in place for just six months and thereafter, there are no notice conditions attaching to any withdrawals.

Derbyshire Offshore is the trading name of The Derbyshire (Isle of Man) Limited, and is wholly owned by Derbyshire Building Society.

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