Guaranteed equity bonds (GEBs) are ideal for cautious investors who are looking to gain from shares but do not want to lose their capital.

GEBs are fast becoming the most popular and safest type of stock market-linked bond, especially as banks , building societies and insurance companies all sell them.

According to the website , structuredretailproducts.co.uk there are currently at least 60 such products open for investment .

One such product is the Woolwich's Capital Plus Plan 6 which offers a minimum return of 25 per cent as well as returning all the original capital after six years.

However, the research manager at IFA Chase de Vere, ulie Smith said they may not be for everyone: Like all stock market-linked bonds, they are not suitable if you need access to your money at any time during the lifetime of the bond.

This is because you are required to tie up your money for a fixed term, most commonly between three and five years.

The head of research at Rowan Co, Tim Cockerill is also quick to point out the negative side of GEBs.

Even with bonds that will return your capital, you can lose money in real terms if you take into account the effect of inflation because you are tying up your money for several years.

He explained: If the index that it links to falls over that period, you will get your original capital back, which will in effect be less than what it is worth in real terms because of inflation.