Bond pays more wine than cash

City investors in a new bond are being tempted with the offer of a more generous return in drink instead of cash.

Naked Wines, which funds independent winemakers from around the world, said it will pay an annual interest rate of 7 per cent in cash or 10 per cent in wine credits.

The three-year bond is designed to raise £3m to support wine-makers as they develop new fine wines.

Investors are being offered a further perk when the bond expires. They will receive an additional 10 per cent premium “if they choose to have an amount equal to the original investment credited to a Naked Wines UK account to be spent on wine”.

The minimum investment for the Fine Wine Bond is £500 and the maximum is £10,000.

The company, founded in 2008, claims to have over 120,000 customers who subscribe for £20 a month to its service to provide the funds to invest in winemakers in return for lower prices.

Named Wines, headed by ex-Virgin executive Rowan Gormley, reported a 57 per cent leap in annual sales to £34.9m and operating profit of over £1m earlier this year.