Guarantees take flight

COMPANIES offering guaranteed income and growth bonds have been pulling out of the market temporarily as rates come down. The market is unlikely to settle down for a few more days.

The M&G Bond is a growth bond so there is no income paid out during the five-year period. The income is reinvested to produce a larger capital sum at the end. Cornhill Life has a five-year income bond paying out 7.5 per cent on a minimum of pounds 1,000.

Vernon Building Society is the highest rate on a variable rate Tessa with no transfer penalties. Allied Trust Bank is still offering 12.68 per cent but the minimum investment is pounds 9,000 up front.

Chelsea Building Society has relaunched its Premier Account (4th Issue) - an account that provides high interest rates but heavily penalises borrowers who remove funds in the first two years. Deposits of pounds 10,000 attract a fixed gross rate of 11.75 per cent (net 8.81 per cent) until 1 February 1993.