Equity Bank and Scottish Provident Ireland have teamed up to create a new product for conservative investors. Save and Invest combines an instant access deposit account currently offering a rate of 5.25 per cent with a conservative investment portfolio.

The save element of the product is a demand deposit account operated by Equity Bank. In the first year, investors are guaranteed a rate 2 per cent above the European Central Bank (ECB) rate, currently running at 3.25 per cent, on the amount placed in the account. In year two the rate will be one percentage point above the ECB. There are no account maintenance charges or fees for this side of the product.

The invest side of the equation is an investment bond linked to a Cautious Managed Fund. Scottish Provident operates this investment and places half of the investment in equities and the other portion in bonds and cash.

A loyalty bonus of 2.5 per cent is paid at the end of year three in the form of extra units. Up-front allocation bonuses ranging from 1 to 2 per cent are granted depending on the amount invested. Charges for the invest product include a bid/offer spread of 5 per cent, a 1 per cent annual management fee and a one-off policy fee of £50. Mr David Overy, head of sales and marketing at Scottish Provident, said the return for similar cautious managed funds over the last five years has been 10 per cent a year, net of all charges. Past performance is not an indication of future returns.