Guaranteed interest and 100% capital protection

Our Guaranteed Investment Bonds earn a guaranteed rate of interest when you put away a lump sum for 5 years, and offers complete protection for your money.

Our current investment bond (Series 3) pays 2.05% annual interest gross. The interest is higher than a typical savings account would pay, because you need to leave your money in the bond for five years.

The investment bond could suit you if you won’t need to access a lump sum for five years, and you’d like to see growth in your money without the uncertainty of investing on the stock market.

However, if you need your money unexpectedly you can withdraw it before five years is up – you just won’t see any growth.

If you die during the five years, your capital lump sum will be returned with an additional death benefit.

How it works

2.05% annual interest gross is guaranteed if you invest for five years. The interest compounds over the five years, so each year the interest is added to the investment and the previous interest. The total interest is equivalent to an overall return of 10.67% over the five years.

Your money is 100% protected.

We can’t give you any advice on whether our Guaranteed Investment Bond is right for you. We can only give you factual information.

Any questions?

Call 0161 214 4650 (9am to 5pm Mon to Thurs and 9am to 4pm Friday)

Or email insure@unitymutual.co.uk

At a glance

  • Invest a lump sum for 5 years.
  • Minimum investment is £1,000.
  • Receive a guaranteed total rate of interest of 10.67% if you keep the bond for 5 years.
  • Get hold of your original investment at any point, but without any growth.
  • To be tax-efficient, you can either open the bond through a Stocks and Shares ISA (tax free) or as a life assurance policy.
  • Detail
  • Fund
  • FAQs

Please read through these documents to make sure the Guaranteed Investment Bond is right for you.

Q.1 What is a Guaranteed Investment Bond?

It is a life assurance policy.

It is designed for people who want to invest a lump sum.

You cannot add money to your investment at a later date.

It provides a guarantee of returning your initial lump sum at any point.

If you keep your bond until the maturity date (five years after the end of the 30 day cancellation period) it will provide guaranteed growth of 2.05% per annum gross. The interest compounds over the term (i.e. each year interest is added to the investment and previously accrued interest) and is equivalent to an overall return of 10.67% over the five year period.

For tax purposes, it is available using a Stocks and Shares ISA route, or via a non-ISA path as a life assurance policy.

It provides a small amount of life cover. For non-ISA investments it is possible to set it up using a joint life basis.

Q.2 What flexibility is there after I invest?

You can access your investment at any time.

However, if you decide to cash-in your investment prior to the maturity date you will not be entitled to any growth on your plan. You would only get back your initial lump sum investment.

At the maturity date you will be able to access your investment and obtain the growth that is attached to your policy.

After the maturity date there is no guaranteed growth provided under the product. You could leave your investment with us. We will contact you just prior to the maturity date to provide you with details of the options available to you and alternative products (where available) and we will ask you what you want to do with your investment.

Q.3 What will I get back?

The table below sets out what you will get back at the end of the five year term:

Lump sum investment

£2,500

£5,000

£10,000

Maturity value

£2,766

£5,533

£11,067

The amount you will receive will depend on your actual lump sum investment.

It is important to remember that the effect of inflation will reduce the future buying power of what you get back. The table below provides examples of this.

The value of £1,000 assuming

Yearly inflation of:

1%

2%

3%

Today

£1,000

£1,000

£1,000

In 3 years

£971

£942

£915

In 5 years

£951

£906

£863

 

Q.4 What if I cash-in my Guaranteed Investment Bond early?

You can cash-in your policy at any time. However, should you do this prior to the maturity date you would not be entitled to any growth in your lump sum.

The return of your lump sum is guaranteed at any time.

Q.5 What happens to my investment if I die?

If you die prior to the maturity date then:

  • If you are the sole Life Assured at that time then your estate would receive a lump sum in-line with the Table below.
  • If there is a second life assured under the policy, the policy will continue in the name of the surviving life assured until maturity or second death.

The table below sets out what would be paid out if you were to die during the five year term:

If you were to die:

Death Benefit

Lump sum investment

£2,500

£5,000

£10,000

If you were to die:

 

 

 

 

During the cancellation period

100%

£2,500

£5,000

£10,000

In year one

101%

£2,525

£5,050

£10,100

In year two

102%

£2,550

£5,100

£10,200

In year three

103%

£2,575

£5,150

£10,300

In year four

104%

£2,600

£5,200

£10,400

In year five prior to the maturity date

105%

£2,625

£5,250

£10,500

If you die after the maturity date, and you have left the policy invested, then:

  • If you are the sole Life Assured at that time then your estate would receive your lump sum with the guaranteed growth of 10.67%, plus any non-guaranteed growth provided after the maturity date.
  • If there is a second life assured under the policy, the policy would continue in the sole name of the second life. They could cash-in the policy if they wished.
Q.6 What are the charges?

There are no explicit charges in our policy. The policy terms and benefits have been designed to incorporate any charges we incur.

We believe this makes it easier for you to understand what the policy is providing.

Please note that if you should seek financial advice in relation to the Guaranteed Investment Bond then any fees or charges payable for the service provided by an adviser should be agreed between you and your adviser, and you would pay for such fees separately.

Q.7 Can I make partial withdrawals?

No. The way in which we have designed the Guaranteed Investment Bond, and the underlying investments we have to make, means that we need to leave our monies invested until the maturity date.

Q.8 Can the Bond be set up on a joint life basis?

Yes, it is possible to do this provided that you do not use a Stocks and Shares ISA route to invest in the Guaranteed Investment Bond.

Q.9 How is my lump sum invested?

The money you invest is invested in our Life 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.

Q.10 What about tax?

If you invest in the Guaranteed Investment Bond using a Stocks & Shares ISA route (up to the 2018/19 subscription limit of £20,000) then there is no tax to pay on exiting the policy. Details of how to take up this option will be supplied when we acknowledge your application.

If you do not use an ISA route, then when you exit the policy, or if you were to change the ownership of the policy:

  • You won’t have to pay any capital gains tax, or basic income tax. This is because our Life Fund will have already paid tax (where appropriate).
  • However, you may have to pay higher-rate or additional rate income tax depending on your circumstances.

You need to consider any tax liability you may incur.

We have based this information on our understanding of current UK law and HM Revenue & Customs practice. Future changes in law and tax practice or in individual circumstances could affect the amount of tax you pay.

You may wish to speak to a financial adviser to find out how tax may affect your investment.

Q.11 Can I change my mind?

After you invest we will send you a cancellation form. You have 30 days in which to consider this, and if you change your mind about your investment within this period we will cancel your policy and return your lump sum.

After 30 days you cannot cancel your policy, but you can cash it in. Please see the section “Can I cash-in my Guaranteed Investment Bond” above (Q.4).

Q.12 How will I know how my investment is doing?

Each year we will send you a statement that details your Guaranteed Investment Bond, including the accrued growth.

We will also write to you prior to the maturity date when the full amount of your guaranteed growth will become available.

Q.13 What if I am unhappy with the service?

If you wish to complain about any aspect of the service you have received, please contact Unity Mutual, Oddfellows House, 184-186 Deansgate, Manchester, M3 3WB.

Further information on how to make a complaint can be found here.

If your complaint is not dealt with to your satisfaction, you can then complain to the Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London E14 9SR. Telephone 0845 080 1800. Web: www.financial-ombudsman.org.uk

Making a complaint will not prejudice your right to take legal proceedings.

Q.14 Are my investments protected?

We are covered by the Financial Services Compensation Scheme. If we cannot meet our obligations you may be entitled to compensation under the scheme.

The compensation limits are 100% of the first £50,000 – with the maximum compensation being £50,000.

Further information on the scheme can be found here, or obtained directly from the Financial Services Compensation Scheme. Tel: 0800 678 1100 or 020 7741 4100, www.fscs.org.uk

 

How much will you get?

The return on your investment is guaranteed, therefore, we are able to tell you exactly what you will receive should you keep your money invested for the full five years.

 

The results reflect a guaranteed growth of 2.05% per annum. There is no annual management charge, so what you see is what you'll get.

Select initial investment amount

£

Number of years of investment

5

Here's what you will receive

£

If you need financial advice

If you’re in any doubt about whether this product is right for you, it’s a good idea to talk to an Independent Financial Advisor (IFA). You can find a local financial advisor by phoning IFA Promotion on 020 7833 3131 or via www.unbiased.co.uk. You may need to pay for a financial advisor’s help, so make sure you ask them about their fees first.

Terms and conditions apply to our Guaranteed Investment Bond. For more information read the product’s Terms & Conditions and the Guaranteed Investment Bond Key Information Document.

Ready to apply?

If you’ve read through everything and you’re happy our Guaranteed Investment Bond is what you're looking for, let’s get your application started.

Apply now