Product review: APS Bond

Product review: APS Bond

A new fixed-term mini-bond has been launched by APS.


Challenger bank APS Financial has launched a £5m four-year fixed-term mini-bond with a view to help support products. 

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Dubbed the APS Bond, the product will provide support for APS’s digital assets and technology as well as new services and products for SMEs. 

Investors can save up to £250,000 per year, with a minimum investment of £1,000, and a return of 7 per cent paid twice a year. The APS Bond is unlisted and non-transferrable, and investors will see their original investments returned at the end of the four-year period. 

APS Financial, a digital banking and electronic money service provider, says more than 70,000 SMEs now hold accounts relating to its Cashplus product. Last year it also announced a tie-up with the Post Office to boost its distribution.

The firm operates without a banking licence, so cannot lend money other than via its own account. APS posted revenues of £25.3m in the 12 months to 31 March, and £4.1m in earnings before interest, tax, depreciation and amortisation.


With interest rates at an all-time low – much to the increasingly vocal dismay of many politicians – the rate available on this bond looks attractive.

APS Financial has grown in prominence in recent years, and a 23 per cent increase in revenues for 2015 indicate it is gaining customers, too.

However, given recent controversies over mini-bonds, investors would be wise to approach new opportunities with caution. 

Concerns were raised after Providence Financial Investments, a US based business, went into administration earlier this year following findings of “fraudulent” securities, shortly after offering UK investors a mini-bond via a subsidiary firm.

As a result, a slew of investors were left in the lurch, highlighting some of the general risks associated with mini-bonds, including the fact that they are not protected by the Financial Services Compensation Scheme. This means that investors are unlikely to see their lump sums returned to them should a business fall into administration.

Nonetheless, with twice-yearly returns at 7 per cent, meaning investors paying £100,000 will see a £7,000 yearly return and £128,000 once the bond matures, the APS bond will appeal to those with greater risk appetite.