Barclays Wealth said it is to launch a fixed income bond after the trial of a five-year product which hit its target of £15 million through a focused placing.

Backed by Barclays Bank, the AA-rated bond, offers 100 per cent capital protection and is due to open from 10 November with a maximum headline rate of 5.25 per cent.

As with the current bond, the new product will be designed to meet mounting demand for low risk, attractive alternatives to cash.

“The Fixed Income Bond has been a great success as it differs from most, if not all, products of this type by locking-in a high headline income rate for five years – much longer than the high street fixed rate savings bond. It is also very competitive against the rates being offered by guaranteed income bonds over a five-year period,” said Colin Dickie, director, Barclays Wealth.

“This product is a real departure for us but the response we have already had demonstrates that there is strong demand for long-dated bonds backed by a AA-rated institution. As a result we believe there is merit in issuing further products of this type as we strive to help advisers find longer-term solutions for their clients. The base rate cut this week helps of course,” he added, referring to the Bank of England’s shock 1.5 percentage point cut to official interest rates to 3 per cent.