InsuranceWala Blog: Knowledge is Power

Investment Options for Times of Uncertainty

June 8, 2022

Not all people are cut out for the ups and downs of the stock market, especially when the markets are very volatile as they have been recently.

One of the alternatives for conservative investors are what are known as principal protected bank notes. Here is a small video on our principal protected bank notes. What they are and how they work with my associate Charles (Chip) Strickland.

Rajesh Jyotishi: Thank you and welcome to our presentation on principal protected bank notes. I have my friend Chip Strickland here with me and Chip and I have been working on these for several years. And with the recent volatility in the world with all the war and the pandemic and everything else that's going on, a lot of people are just looking for a little bit more certainty and a little bit more safety, at least with a portion of their savings and the principal protected bank notes are an excellent option where you can get a little bit higher interest rates than your typical bank CD. At the same time, it can be used in retirement accounts and non retirement accounts.

Now I do want to say that these are a little bit different than our fixed coupon barrier notes which offer a little bit higher interest rate, which we'll talk about in another video. But with that, Chip, thank you for joining us, and can you share with us briefly what bank notes are and how they work?

Chip Strickland: Certainly. Thank you, Rajesh. Very simply put, bank notes have been around since the Middle Ages. When we talk about promissory notes, most of us are familiar with those types of contracts. And that's all it is, it's a contract between a borrower and a lender.

Most of us would be familiar with it from the standpoint of purchasing a home or perhaps a vehicle. We would all, during that process, at some point, we would've signed a promissory note in which we agreed to pay the lender a certain amount of interest and a certain amount of principal over a certain amount of time. And in this instance, with a principal protected bank note, the roles are simply reversed whereas we, the investors, become the lenders, the banks become the borrowers and they agree and promise to pay back a certain amount of interest and principal over a certain amount of time.

Rajesh Jyotishi: And what type of interest rates are you looking at, what type of terms?

Chip Strickland: Generally speaking, on these types of investments, we're looking at three to five years for the term and we're looking at anywhere from 3.5% to 5% over that period of time, depending on the length of time.

Rajesh Jyotishi: So Chip, I know there are principal protected bank notes and they're offered by the banks, but how safe would you say they are?

Chip Strickland: Well, I would say that they're very safe, RJ, because the types of institutions that we're talking about here are some of the largest banks, investment banks in the world. We're talking about Citi Group, Wells Fargo, JP Morgan Chase. And then we've got Barclays and BNP Paribas, which is a large French bank, all highly rated investment banks. They're all triple a rated or better. So as far as the safety is concerned, they're guaranteeing our principal based on the full faith and credit of their ability to pay.

Rajesh Jyotishi:  And what kind of fees are associated with these, Chip?

Chip Strickland: Well, that's the good news. If held to maturity, there are no associated fees with an investment like this. And I know people say, "Well, that might be a little too good to be true," but as long as held to maturity in a brokerage account, then, there are no associated fees with this investment. Now, however, if there's a need to redeem early, then, there could be surrender charges involved at that point, it just depends on a case by case basis.

Rajesh Jyotishi: One last question for you. How long have you been doing this, Chip?

Chip Strickland: Roughly nine years. I got my start in 2013 with these types of investments working for the trust department of a large regional bank and I noticed that these types of investments were being used for high net worth individuals, families, corporations, trusts and even a few cities and state governments.

Rajesh Jyotishi: Awesome. There you have it, folks. This is how our principal protected bank notes work. And if you have interest in these, just reach out to us. Let's schedule a discovery call and see if this is the right thing for you. With that, thank you, Chip. I really appreciate your time, as always.

Chip Strickland:  Thank you. I appreciate the opportunity and I hope you have a great day.

Rajesh Jyotishi:  You too.

If you would like to find out more about our bank notes and other investment strategies, schedule your discovery call today!

Make your choice clear! Schedule a call today.
Book a Discovery Call

Working with InsuranceWala is easy

With 27 years of experience, we can help you save time, money, and aggravation.
Discover InsuranceWala

Discovery Call

Book a call so we can learn more about your unique situation and coverage needs.
Make Better Choices with InsuranceWala

Review Your Options

We will go over the best plans for your needs and answer any questions you have.
Save Money with Insurance Wala

Enroll & Save

We will help you gather the right information to enroll and even do the paperwork for you.