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Cautious investors can combine guaranteed returns while gaining exposure to the stock markets under a new tax-efficient product, according to Abbey.

The bank has launched its Guaranteed Capital Plus (Issue 3) product, which is available for three and a half or six years. The new additions form part of its latest range of guaranteed investment products linked to the FTSE 100 with aim of providing security of a capital guarantee.

The 3.5 year option offers 18 per cent return if the FTSE 100 has increased over the same time frame, even by one point, or a guaranteed minimum return of 2 per cent over the period if the FTSE 100 has decreased or stayed the same over the period.

While the six year option offers 40 per cent return if the FTSE 100 has increased over the same period, even by one point, or a guaranteed minimum return of two per cent if the FTSE 100 has decreased or stayed the same over the period.

Reza Attar-Zadeh, director of savings and investments at Abbey, said: "Given the volatility of the stock market, many investors are deciding to take a cautious attitude to risk.

"Abbey's Guaranteed Capital Plus gives investors an exposure to the superior returns available from linking to equity markets without putting their capital at risk. The product is tax-efficient and ensures a guaranteed minimum return, regardless of the stock market performance."

The product is available outside an Isa and within an Isa, where returns will be free of Income and Capital Gains Tax. The Isa choice is only available for the six-year option.

The new product is available until September 9, 2008, or earlier if sold out, the minimum investment is £1500.

The product's return rate depends on the calculation of whether the FTSE 100 has increased or decreased and is calculated on whether the final index level is higher than the initial index level, which is the closing level of the FTSE 100 on the strike date, October 3, 2008.

The final index level calculation is the arithmetic average of the official daily closing level of the FTSE 100 over the final six months of the period of the plan. For the 3.5 year term, the final index level date lands between October 5, 2011, to April 4, 2012, and between April 3, 2014 to October 2, 2014, for the six-year term.

Ian Clarke, investment research manager for Sesame, believes that digital structures can be useful as a low-risk component of a diversified growth portfolio, but is not market leading in comparison with its competitors.

He added: "These structures typically provide investors with a degree of security and the opportunity for a comparatively high fixed return that is dependent on modest stock market gains.

"Investors in the Abbey product receive either 2 per cent or 40 per cent after six years depending on whether the FTSE 100 achieves positive growth.

"Most digital plans offer return of capital as a minimum, so Abbey's 2 per cent minimum return is unusual but perhaps a bit of a gimmick. Investors with a little more to invest and prepared to accept a little more credit risk might consider other similar offerings from leading providers."