Bond Details

The Capital Investment Bond is a single premium savings plan which invests in our With Profit fund. The aim of this plan is to achieve strong returns without compromising security by offering underlying guarantees to the fund. The bond is available as a single or joint life contract.

With Profit fund investment

The With Profit fund (series 3), through the Participating fund of Friends flrst, gives you access to the stock, gilt and property markets without the associated risk of a negative return on your investment.

With Profit fund guarantees

This fund offers two separate guarantees. Each guarantee will apply provided you do not withdraw money during your investment term.

• Capital guarantee
  You are guaranteed to receive at least your initial investment on your maturity date.
• Unit price guarantee
  You are guaranteed that unit prices will not fall in value.

If you choose our income facility (see Bond features) the capital guarantee will become an 'initial capital less income' guarantee, provided the level of income you choose does not exceed the current With Profit regular bonus rate.

If you make an occasional withdrawal or take an income at a higher rate than our bonus rate, the above guarantees may not apply.

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How Capital Investment Bond works

The minimum amount you can invest is €5,000 and you choose an investment term of either 5 or 10 years.

When you make your investment we will apply an 'allocation rate', as follows:-

Once the allocation rate is applied, your investment will buy units in the With Profit fund.

You will buy units at the offer price and we will sell them (when you withdraw money) at the bid price. There is a 5% difference between the bid and offer prices.

As the unit price of the fund grows so too will the value of your investment. The value of your fund at any time is determined by the number of units in your fund multiplied by the unit bid price.

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Bond features

• Critical Illness/Death benefit
  If you are diagnosed as suffering from a critical illness, or you die, during the term of the policy, you or your estate will receive 101% of the value of your fund or your original investment (less withdrawals), whichever is higher. For joint life policies, you can link this benefit to the first or second life.
• Income facility
  You can receive an income from your investment. The minimum income is €250 and the maximum is 10% of your original investment. Income payments will stop if your fund value falls below €1,500. The frequency at which you can avail of this facility is as follows:-

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Encashment

You can fully or partially surrender your bond at any time. The minimum withdrawal is €250 provided the fund value after the withdrawal is at least €1,500.

The surrender value will normally be the bid value of units at that time, however we reserve the right to use an alternative bid price. This will only apply if markets have experienced a significant fall in value and it is necessary to protect the interests of continuing policyholders.

Taxation

• Relief on investment
  There is no tax relief available on your investment under this plan.
• Tax relief on funds
  The fund(s) you select will grow free of income, capital gains and DIRT tax.
• Tax on encashment
  When you take any money out of your policy you will have to pay an exit tax on the growth element of your withdrawal. The exit tax rate is currently standard rate plus 3%.
• Claiming benefit
  If a claim for Critical Illness or death benefit is made, the benefit will be paid free of exit tax.

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Limits