Capital G Bank Ltd. has announced the launch of a new certificate of deposit, the Stock Market CD.

The company said the new deposit product combines the features of the time-honoured conservative certificate of deposit with the potential for higher returns from the stock market and added that the combination of the attributes of these asset classes creates greater performance expectations for investors who don?t want to risk the potential loss of principal associated with outright ownership of individual stocks or mutual funds.

The Stock Market CD is a five-year fixed term deposit available in Bermuda and US dollars.

Its yield is tied directly to the Standard & Poors 500? index (S&P 500) providing the opportunity for significant returns.

The yield on the deposit will be equivalent to between 55 percent and 75 percent of any upward move in the S&P 500? index from the start date to the maturity date, said Capital G.

In the event of a downward move in the index over the five-year period, the investor will still receive their initial investment.

To invest in a Stock Market CD investors will need to commit a minimum of $25,000 by December 15, 2003, said the company in a release.

The Standard & Poors 500? is an index made up of five hundred different stocks. Each is selected for liquidity, size, and industry.

The index is weighted for market capitalisation.

It is the benchmark of the overall market, and frequently used as the standard of comparison in terms of investment performance.

?The Stock Market CD is a good fit for the investor who is risk averse and has the ability to lock away funds for the full five year period to earn a return geared to the US stock market, but who does not want to risk the potential loss of capital associated with stock market volatility?, said Valerie Guagliano, head of Client Relationship Management. ?There are no fees associated with the new CD and customers with existing CDs at Capital G are permitted to break them without penalty to transfer the funds to the Stock Market CD.?

Sarah Farrington, president & CEO added: ?By combining the attributes of these asset classes we?ve created the perfect investment option for the savvy investor with a medium to low risk tolerance. This innovative deposit product is yet another example of our ongoing product development efforts as we continue to provide new and exciting fresh financial solutions. ?