New products from NBG

The National Bank of Greece on Tuesday unveiled two investment products with guaranteed capital, in response to the government’s call for the banking industry to offer products with favorable returns to savers to make up for negative real interest rates on savings. The capital-guaranteed products offer returns that are higher than simple savings accounts, with the final yield dependent on economic indicators, National Bank said. With banks cutting interest rates on both savings and borrowing by up to 50 basis points after the European Central Bank trimmed its benchmark interest rates early this month, investors have seen returns on their savings vaporize. After taking into account Greece’s above-average inflation, savings interest rates are generating negative yields. The first product, which is linked to the FTSE/ASE-20, kicks off on January 1, 2003 and ends April 9 the same year. The minimum price is 14,500 euros. Investors receive an annual yield of 4.10 percent in the event the FTSE/ASE-20 records a rise, remains flat or posts a decline smaller than 4 percent compared with the price at the start. In the event the index falls by more than 4 percent but below 7 percent from the starting price, then the investor will receive an annualized interest rate of 2 percent. The second product launched by National Bank is tied to the parity rate between the euro and the dollar. With a duration of six months, the minimum investment is 14,500 euros. In the event the euro/dollar parity rate goes up by 4 percent at the end of the investment period, the investor will receive an interest rate of 5 percent. The yield is 2.3 percent should the parity rate exceed the level at the beginning of the six-month period. For other outcomes, the investor receives an interest rate of 0.5 percent. The two products are available at National Bank branches from today to January 8.

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