UK-based Cater Allen Private Bank, part of the Santander Group, has launched the new Cater Allen protected investment plan — Issue 1 which offers investors a combined investment plan consisting of a one-year deposit account paying a fixed return of 4% gross and a six-year FTSE 100 linked investment product.
The bank said that the investment element of the product offers 100% capital repayment at maturity after six years, plus the benefit of any rise in the index, subject to a maximum return equivalent to 60% of the initial investment.
The investment element also provides the possibility for early maturity at the end of year four and year five of the maximum six-year term, subject to FTSE index growth on specified observation dates. If the investment matures early, customers receive a fixed payment equivalent to 30% (year four maturity) or 40% (year five maturity) of the initial investment, plus the return of initial investment. The growth is not compounded.
The deadline for investment in the new plan is March 16, 2009 and has a minimum investment level of GBP14,400. For individual savings account transfers only, the deadline is the March 2, 2009 and the minimum investment level is GBP28,800.
Ricardo Marin-Bataller, head of structured products at Santander Private Banking, said: In recent months there has been significant volatility in the share values of the FTSE 100 and in a declining interest rate environment and the Cater Allen Protected Investment Plan has been developed as a viable investment option.
While it is not possible to know whether shares will return to their previous levels, current valuations could be considered low by historical standards and this in turn may offer attractive prospects for long-term investment. This product therefore offers an attractive and innovative option for investors seeking exposure to any future growth in the FTSE while significantly reducing capital risk.
