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Cater Allen launches structured product paying up to 37 per cent

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Cater Allen Private Bank, part of the Santander Group, is launching a revised version of its FTSE 100 linked plan that offers the potential of up to 37 per cent return on maturity, if t

Cater Allen Private Bank, part of the Santander Group, is launching a revised version of its FTSE 100 linked plan that offers the potential of up to 37 per cent return on maturity, if the final index level stays the same or increases.

The Capital Guaranteed Defined Return Plan 2 has replaced the original Defined Return Plan whose offer period closed last week. The new product consists of either a 3 ¾ year, or a 5 ½ year term plan.

The 3 ¾ year term will guarantee the initial investment, plus an additional return equivalent to 18 per cent of the original investment, if the FTSE 100 index stays the same or increases by any amount from its initial index level. If the final index level is lower than the initial index level, investors are guaranteed to receive their original investment, plus 0.25 per cent.

Meanwhile, the 5 ½ year term will guarantee the initial investment, plus an additional return equivalent to 37 per cent of the original investment, if the FTSE 100 index stays the same or increases by any amount from its initial index level. If the final index level is lower than the initial index level, investors are guaranteed to receive their original investment, plus 0.50 per cent.

The investment returns will be determined by comparing the initial index level of the FTSE 100 and the final index of the plan. The initial index will be taken on the 18 September 2009. The final index level of the plan is calculated by averaging the FTSE 100 index level over the last six months of the investment term. This allows for any sudden fluctuations in the index.

Ricardo Marin-Bataller, head of structured products at Cater Allen Private Bank, says: "The response to the original launch was fantastic; people liked the idea of guaranteeing a return on investment from any rise in the FTSE 100 regardless of how small. As such we could not leave our investors disappointed, so we have decided to launch an enhanced version of the product, with improved, rates so more people can take advantage of this fantastic opportunity.

"Part of the reason for its popularity, is not just the prospective high returns, but also the fact that the return might be subject to Capital Gains Tax instead of Income Tax. This might benefit investors, because the taxable amount on any gains can be less than income tax rates."

The deadline for investment in the new structured product is 3 September 2009. It has a minimum investment level of GBP7,200 and a maximum of GBP1m.

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