The Inflation Protected Deposit Bond 2 is a five-year, fixed-term, structured deposit bond that offers a minimum return of 16% at maturity in 2017 or, if greater, 100% of retail price inflation growth on the original capital invested.
The bond is designed to return the original investment at the end of the fixed term, 22 March 2017, with payment two days later. The new plan opened on 9 January and will close on 2 March 2012.
Legal & General’s head of business development, James Harrington said: “Although the rate of inflation has fallen back slightly in recent weeks savers are aware that the gap between interest rates and the retail prices index continues to present an inflation risk to their capital.
"The Bank of England Inflation attitude survey published last month [15 December, 2011] revealed that people expect level of inflation to still be at 3.5% in five years time. If that happens the purchasing power of their savings would be reduce to less than 85% of today’s value.”
