Cater Allen launches new capital protected investment plan

Cater Allen Private Bank announces the launch of its first structured product of 2009, the "Cater Allen Protected Investment Plan - Issue 1" available from Monday 2nd February, 2009. This new product offers investors a combined investment plan consisting of a one year deposit account paying a fixed return of four per cent gross and a six year FTSE 100 linked investment product. Both of which are 100 per cent capital protected at maturity.

The investment element of the product offers 100 per cent capital repayment at maturity after six years, plus the benefit of any rise in the index, subject to a maximum return equivalent to 60 per cent 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 per cent (Year 4 maturity) or 40 per cent (Year 5 maturity) of the initial investment, plus the return of Initial Investment. The growth is not compounded.

Ricardo Marin-Bataller, Head of Structured Products at Santander Private Banking, commented: "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.

"Whilst 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.

The deadline for investment in the new plan is 16th March, 2009 and has a minimum investment level of £14,400. For ISA transfers only, the deadline is the 2nd March 2009 and the minimum investment level is £28,800.

The proceeds from this product attracts income tax, but can be held in an ISA or a SIPP, both of which should allow you to take the proceeds without further taxation. A 10 per cent return, tax free, is equivalent to 16.67 per cent for a higher rate tax payer before paying income tax at 40 per cent on an investment.