Irish Life is to launch a new bond that aims to pay out an income higher than the return available from traditional bank and building society deposits while also offering the possibility of capital growth.

The Income Plus Bond aims to provide an income of more than 3.5 per cent per annum after tax and charges. The income will be paid out in two instalments each year, in May and November. However, neither the capital nor the return is guaranteed.

The bond is expected to be launched shortly and will be invested in high-yielding assets with some 60 per cent invested in commercial property in the Republic while the remaining 40 per cent will be invested in high-yielding bonds and equities.

"This bond will suit customers whose priority is income and who will not be concerned that the value of their lump sum will vary over time," Irish Life says.