National Savings and Investments (NS&I) yesterday launched the 18th issue of its Guaranteed Equity Bond (GEB).
The five-year bond pays returns linked to the performance of the FTSE 100 index.
Over the term of the bond investors can earn a maximum of 40% on their original investment, with no risk to their capital.
Returns are calculated by comparing the start level of the FTSE 100 index, averaged out over the first five days of the investment term, with the end level, averaged out over the final six months of the investment.
The minimum investment is £1,000, and the maximum is £1 million, or £2 million for a jointly held bond.
Money invested in the bond is 100% secure, with backing from HM Treasury.
Set up in 1984, the FTSE 100 lists the UK’s 100 most capitalised companies listed on the London Stock Exchange.
Companies on the index include Tesco, Unilever, Thomas Cook, Prudential, Aviva, and BP.
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