Bets on beer and rugby that can pay 7.25pc

A RUGBY club and a Scottish brewer are the latest organisations to offer savers a better return for their cash.

Innis & Gunn today launches a beer bond paying 7.25 pc, while Premiership rugby union side Wasps offers 6.5 pc.

To raise £3 million for a new brewery, the beer company has a four-year bond paying the headline rate annually.

Regular customers who do not want to be paid in cash can instead opt for a 9 pc annual return in beer vouchers. Minimum investment is £500. Wasps hope to raise up to £35 million to develop its new home, the Ricoh Arena in Coventry. Interest will be paid twice yearly, and there is a £2,000 minimum investment.

Both bonds are tapping into huge demand for better returns than those offered on the High Street. The 7.25 pc cash interest rate is nearly four times the average 1.98 pc paid on comparable three-year, fixed-rate savings bonds, analyst Moneyfacts has found.

Five-year, fixed-rate deals currently

pay an average 2.49 pc. However, savers risk losing all of their money if either company runs into trouble.

They’ll get what’s essentially an IOU — a promise to pay annual interest. There is no Financial Services Compensation Scheme protection, which covers savings up to £85,000.

There is a key difference between the offers, too. Wasps’ bond is a retail bond — which is listed on the stock market and can be traded. The Innis & Gunn offer is a mini-bond, which means you cannot sell quickly if you want to exit early.

Risks are high, so you’ll need to do your research. Last year, Innis & Gunn’s turnover was £11.8 million — up from £10.5 million in the previous 12 months. Wasps plan to increase revenues at their stadium, which already has a concert venue, restaurants, hotel and casino.

Investors should beware such bond investments can end calamitously.