Make your money work harder for you with this medium to long-term investment plan
- Invest a lump sum between £1,000 - £150,000
- Guaranteed amount of at least 103% after five years
- Higher potential returns than a bank or building society
- If you surrender in the first five years a surrender penalty will apply, meaning you may get back less than you invested
About this policy
Have a lump sum you're thinking of investing? Our Investment Bond could be the perfect option to watch your savings grow. Our Investment Bond is a single premium investment that has no fixed term, but is designed to be held for a minimum of five years.
Please be aware that a surrender penalty will apply if cashed in within the first five years.
What are they?
These plans are designed for anyone that has a single lump sum they want to invest for a minimum of five years.
There is also the added bonus of knowing that if you save for longer than five years, you will be guaranteed a minimum return of at least 103% plus potential annual and final bonuses.
Who are they for?
Anyone can have a plan, although a parent or guardian will need to complete the proposal form for any child under the age of 11 and their signature required for a surrender for any child under the age of 16.
It is not advisable to invest in this bond if you know at the outset that you will require the money within five years.
This bond can be opened in joint names.
Why open one?
Our Investment Bond is a great way to invest a lump sum, with the added peace of mind of a minimum guaranteed amount of 103% (after five years) plus the potential for annual and final bonuses.
As a mutual friendly society we have no shareholders to satisfy therefore all our surplus profits are shared with our members. We specialise in offering with-profits policies, which offer greater potential returns by investing in a range of different assets – without exposing your capital directly to the stock market.
Invest today for your future financial goals.
Frequently asked questions
Our most commonly asked questions surrounding the Investment Bond can be found below.
We recommend a minimum investment period of five years, after which you can either withdraw your investment or leave it to earn future bonuses until such time as you need it. Should you need to withdraw some of your investment at a future date we can invest your lump sum in up to three separate policies, with a minimum of £1,000 per policy, which will enable you to withdraw part of your investment without having to surrender (cash in) the entire investment. If you surrender your bond within five years of commencement then a surrender penalty will apply and you may get back less than you invested.
No, this bond does not provide any income, but if you require income you might want to consider our Income Bond.
We invest in a range of different assets with the aim of providing a higher return in the medium to long-term than is achievable with a bank or building society account. Sheffield Mutual's with-profits fund is managed to provide a low to medium risk investment, appealing to anyone with a more cautious approach to investment. Our investments include property, shares of UK companies, government gilts, corporate bonds, commercial mortgages and cash.
The proportion held in each of these will vary depending on market conditions. You'll be pleased to know that we seek to adopt an ethical approach to investing and it is our policy not to invest knowingly or directly in industries relating to armaments, tobacco, gambling or pornography.
We invest our funds as described in the previous section and receive a return on those investments which can vary from year to year. At the end of March or early April we review the returns achieved during the previous calendar year and declare a bonus rate for each policy type for that period. The rate varies depending upon overall investment returns and is not therefore guaranteed to be paid at the same rate or at all, in future years.
Bonuses are calculated at the appropriate rate based on the sum assured not the amount of premium paid and on encashment after five years subject to the conditions outlined below, you will receive the initial Sum Assured plus bonuses added during the life of the policy.
We also try to ‘smooth’ returns over the life of the policy by retaining some of the investment return in good years to maintain bonus rates in less positive years. However, to ensure members receive their fair share of returns on their policy over its lifetime, there may be an additional terminal bonus paid on maturity. Payment of this type of bonus depends entirely on investment performance and the rate at which annual bonuses have been added and is not guaranteed.
You cannot make any withdrawals, but if your circumstances change, you can surrender your policy. However, the plan is designed for medium to long-term investment and the surrender value may be less than the amount you have paid in. Please note, it is not advisable to invest in this bond if you know at the outset that you will require the money within five years. There is the option to split your investment into up to three separate policies, which means you would not need to surrender the whole amount if you need to withdraw funds in the future.
Providing the plan runs for at least five years, we will guarantee a minimum final amount of 103%. The final value of your plan will depend upon investment performance, but bonuses are declared each year, and these are added to your guaranteed final amount. Once added, these bonuses cannot be taken away.
In the event of adverse investment conditions the Society reserves the right to apply a Market Value Reduction (MVR) to the final amount (sum assured) and any bonus already added. However the Society guarantees that the application of the MVR after five years will not reduce the proceeds below 103% of the initial investment. An MVR will not be applied in the event of the policy becoming a claim as a result of the death of the single policy holder or the death of the second policy holder for joint policies.
The Bond provides a guaranteed final amount of 103% of the initial investment. In the event of death, we will pay out the final amount plus any bonuses that have been added to your policy. In the case of a joint life application on the first death, the bond will continue in the name of the survivor.
The money you save is invested in a fund on which the Society pays tax and tax at the basic rate may be treated as paid on any taxable gain, which means there is likely to be no further tax to pay unless you are taxable at the higher rate. However, a gain on which tax is treated as paid may have an effect on your tax liability if you qualify for age-related allowances or reliefs, or you are receiving tax credits. All references to taxation are based on the Society’s understanding of current tax legislation and practice, which may change in the future.
If you die the people who inherit your bond may have to pay inheritance tax and some income tax.
When you open a policy with us, you will automatically become a member of the Society (adult policyholders only). As well as being able to have your say on how the Society is run each year, you will also have access to various discretionary benefits when available, such as optical and dental grants, as well as exclusive access to a range of discounts and offers.
Our team would be more than happy to provide you with factual information about our products and services, so you can make your own decision about how to proceed. However, we are unable to give any advice or recommendations on the suitability of our products. If you are unsure, you should seek advice from a qualified financial adviser, which may incur a fee.
To comply with regulations, we will require confirmation of your identification and address. We’ll aim to do this using an electronic verification system, but reserve the right to ask for appropriate documentation from you, if this is not possible. If the policy is for a child we'll need a copy of their birth certificate which must be independently certified.
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