The Market Range Deposit is a four year capital protected product designed to provide returns linked to the UK stock market. It offers the opportunity to receive an annual Return based on the number of business days that the FTSE 100 Index closes within a specified range.
The account is designed to return your deposit at the end of the four year term, irrespective of the performance of the Index.
Essentially, this is a capital protected product providing returns linked to the UK stock market which is designed to pay an accrued annual return between a minimum of 0% and up to a maximum of 6%, calculated on the number of business days the FTSE 100 Index closes within a specified range. Any annual return will be paid at the end of each year on the relevant annual payment date.
For example, if the initial level of the FTSE 100 Index is 5,250 the specified range would be determined as follows:
- Lower level of the range: 90% of 5,250 equates to 4,725
- Upper level of the range: 120% of 5,250 equates to 6,300
Using this range to illustrate returns, if in Year 1, the Index closed within this range on 150 Business Days in the year, the Annual Return payable at the end of Year 1 would be 6% x 150/240 = 3.75%.
Dave Isley, Head of NatWest IPB comments, “Given the ongoing uncertainty in the financial markets, earning a positive return linked to the growth of the UK stock market might be viewed as challenging. However, accruing a return daily as long as the UK stock market remains within a specified range might be a way of generating a positive return during these uncertain periods.”
This is a sterling denominated product with a minimum entry sum of £10,000. The offer period runs until 16 December and the last date for funds is 12 January 2012. Start date is 23 January for four years.
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