UK Outlook Selector Deposit Growth. Business area. Plan 2

Transcription

1 UK Outlook Selector Deposit Growth Business area Plan 2

2 Contents Key dates 2 Important terms 3 Key features of the UK Outlook Selector Deposit Growth Plan 2 5 Is the Plan right for me? 6 How is the return calculated? 7 About the FTSE 100 Index 10 What are the risks? 11 Questions 12 Contacts 18 Terms and Conditions 19 Key dates Plan available for sale 26 March 2012 to 25 May 2012 ISA transfer application deadline 4 May /2012 ISA application deadline 5 April /2013 ISA application deadline 25 May 2012 Direct Account application deadline 25 May 2012 SIPP/SSAS application deadline 25 May 2012 Initial Valuation Date 20 June 2012 Start Date 27 June 2012 Final Valuation Date 20 June 2018 Maturity Date 27 June

3 Important terms Here is a short description of some of the important terms used in this Plan brochure. See the Terms and Conditions for the full definition of all terms used. Account The deposit account opened by RBS plc for your Deposit. An Account may be either a Direct Account or an ISA Account. AER - Annual Equivalent Rate. This illustrates what the interest rate would be if paid and compounded each year. Application Form The application form to invest in the Plan, either via an ISA or Direct Account, and can include a Transfer Application Form. Business Day Any day (other than Saturday or Sunday) on which banks are open for business in the UK. Cash ISA An Account established in accordance with the ISA Regulations and consists of a cash component only. Client Money Money held in accordance with the provisions of the FSA s Client Assets Sourcebook relating to client money. Deposit The initial deposit or the amount transferred from another Cash ISA deposited in the Account. Deposit Taker In this case RBS plc is the licensed deposit taker. Direct Account Any part of the Deposit that is not part of an ISA. Final Index Level The average of the closing levels of the Index on the 20th of each month in the last year of the Plan (13 monthly observations in total), or the next Business Day when not a Business Day. Final Valuation Date The date when we calculate the Final Index Level and the Maturity Value. FSA The Financial Services Authority, or any successor organisation. FSCS The Financial Services Compensation Scheme. Gross - The interest rate paid before the deduction of tax. Index The FTSE 100 Index which is made up of 100 of the largest companies by market capitalisation listed on the London Stock Exchange. Initial Index Level The closing level of the Index on the Initial Valuation Date. Initial Valuation Date The date when we calculate the Initial Index Level. ISA An Individual Savings Account. ISA Account An Account opened by RBS plc in accordance with the ISA Regulations. ISA Manager The person who is approved to administer an ISA, and in respect of an ISA related to the Plan, means The Royal Bank of Scotland plc. ISA Regulations The Individual Savings Account Regulations 1998, as amended or replaced from time to time. Maturity Date The date on which your Deposit and any additional return due to you is paid into a Client Money account, pending your further instructions. Maturity Value The final value of the Deposit (together with any return), calculated as set out in the Plan brochure. Plan UK Outlook Selector Deposit Growth Plan 2, comprising the deposits placed through your ISA and/or your Direct Account, as specified in your Application Form(s). Plan Manager The company which is responsible for the administration of the Plan, which in this case is The Royal Bank of Scotland plc. Start Date The date on which the Deposit is placed with RBS plc. Transfer Application Form An application form to transfer your investment in an existing ISA to an ISA Account under the Plan. Valuation Date The two days per month when you can withdraw money from the Plan and which will be the 8th and the 21st of each month (or the next Business Day when not a Business Day). We, us, our and RBS plc The Royal Bank of Scotland plc. We are a member of The Royal Bank of Scotland Group plc (the RBS Group ). For information about our group of companies, please visit and click on About Us. 3

4 What is an index? An index is a tool for measuring the performance of a collection of financial assets. An index may, for example, be composed of shares in companies from a specific industry sector or a particular country or it may contain a range of commodities such as oil, gold or wheat. An index is therefore often useful as a benchmark which can be used to represent the performance of a particular market sector. What is the FTSE 100 Index? The FTSE 100 Index is a measure of the share price performance of the largest 100 companies listed in the UK on the London Stock Exchange. The companies are selected based on their market capitalisation. It currently includes household names such as Tesco, Vodafone and Unilever. What is market capitalisation? Market capitalisation is a measure of the size of a company. It is calculated by multiplying the number of shares in a company by the current share price. 4

5 Key features of the UK Outlook Selector Deposit Growth Plan 2 The UK Outlook Selector Deposit Growth Plan 2 (the Plan ) is a six year deposit where the return is dependent on the performance of the FTSE 100 Index (the Index ). The Financial Services Authority is the independent financial services regulator. It requires us, The Royal Bank of Scotland plc, to give you this important information to help you to decide whether the UK Outlook Selector Deposit Growth Plan 2 is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference. The Plan The Plan is designed to repay your Deposit in full at maturity plus a return linked to the performance of the Index after averaging, as explained on pages 7, 8 and 9. The Plan offers investors the opportunity to link their return at maturity to their view on how the Index may perform over the life of the Plan. Within the Plan there are three options to choose from, each of which represents a different outlook on the potential performance of the FTSE 100 Index. We have called these three options: Option One - Low Growth Outlook; Option Two - Medium Growth Outlook; and Option Three - High Growth Outlook. When you invest in the Plan, you will need to designate your Deposit across one or more of these three options. Each option has a different potential return linked to the performance of the Index. You can designate your Deposit across as many of the options as you wish. If you designate your Deposit across more than one option, any potential return will be calculated with reference to the amount of your Deposit that you designate to each option. You should be aware that, depending on the performance of the Index, you may only receive back your Deposit. Further details of the three options are explained on page 7. Details of minimum investment amounts in the Plan and the minimum amount you can designate to each option are explained on page 12. When you invest in the Plan, your money will be placed on deposit with The Royal Bank of Scotland plc ( RBS plc ). This means that, although the Plan is designed to repay your Deposit at maturity, this is dependent on the ability of RBS plc to pay what it owes you. Therefore, if RBS plc were to default or go bankrupt you could lose some or all of your money. If that occurs you may be entitled to compensation from the Financial Services Compensation Scheme (`FSCS ). See page 17 for further information. The UK Outlook Selector Deposit Growth Plan 2 is only available via your financial adviser Before you invest in the Plan you should ensure that you read and understand this brochure, including the Terms and Conditions. You can only invest in this Plan if a financial adviser has confirmed it is suitable for you. Please see the fold out pages 3 and 4 for useful explanations of the important terms used in this brochure. 5

6 Is the Plan right for me? The points below highlight some of the factors you should consider with your financial adviser when deciding whether to invest in the Plan. The Plan may be right for you if: You have a minimum 5,000 to invest. You have enough money to cover any emergencies and are happy to keep your money invested for six years. You want to know that your original Deposit will be repaid to you at the end of six years (subject to the risk that RBS plc defaults or goes bankrupt and is unable to pay what it owes you). You accept the risk that you may not receive any return on your Deposit. You are happy for your money to be deposited with RBS plc for six years. It suits you that any returns on this Deposit which are placed outside an ISA may be subject to income tax at your marginal rate. You want the opportunity to make a tax efficient return by investing in a Cash ISA. You would like a Deposit with returns linked to the performance of the FTSE 100 Index. The Plan may not be right for you if: You may need access to your money in the next six years. You do not have any funds set aside for an emergency. You are looking for a regular income or dividends from your investment. You definitely want to receive a return on your Deposit. You are not willing to take the risk that RBS plc may default or go bankrupt during the life of the Plan. You want to add to your Deposit on a regular basis. You are not sure how the Plan works or have not understood this brochure. You do not want a Deposit with returns linked to the performance of the FTSE 100 Index. 6

7 How is the return calculated? The final return will depend on the option(s) you have selected. If you have selected more than one option in the Plan, the final return from each option will be based on the amount you originally designated to that option. Details of the minimum investment amounts in the Plan and the minimum amount you can designate to each option are explained on page 12. On the Final Valuation Date we will calculate whether the Index has risen and whether any return is due on your original Deposit. To do this we will compare the Final Index Level with the Initial Index Level. Initial Index Level This is the closing level of the FTSE 100 Index on the Initial Valuation Date. Final Index Level This is calculated as the average of the closing levels of the Index on the 20th of each month over the last year of the Plan (13 monthly observations), or the next Business Day when not a Business Day. To calculate the average, we will add the 13 monthly Index levels together and divide that result by 13. Averaging The process of averaging may benefit the performance of the Plan if the Index falls over the averaging period. However, if the opposite occurs, this will constrain the Plan s performance when compared to a calculation method which does not use averaging. There are three options to choose from, each of which represents a different outlook on the potential performance of the FTSE 100 Index: Option One - Low Growth Outlook If the Final Index Level is less than 90% of the Initial Index Level, you will not receive a return at maturity. You will receive only the amount you designated to Option One. If the Final Index Level is the same as or greater than 90% of the Initial Index Level, you will receive the amount you designated to Option One plus a fixed return at maturity that is equal to 31.5% gross (4.66% AER) of the amount you designated to Option One. The maximum return at maturity is 31.5% gross (4.66% AER) of the amount you designated to Option One. Therefore, if the Final Index Level is more than 31.5% greater than the Initial Index Level, you will not benefit from this rise and will receive the maximum return of 31.5% gross. For example, if the Final Index Level is 50% above the Initial Index Level, you will receive a return at maturity of 31.5% gross of the amount you designated to Option One. Option Two - Medium Growth Outlook If the Final Index Level is the same as or less than the Initial Index Level, you will not receive a return at maturity. You will receive only the amount you designated to Option Two. If the Final Index Level is greater than the Initial Index Level, you will receive the amount you designated to Option Two plus a return at maturity that is equal to 2 times the percentage by which the Final Index Level is greater than the Initial Index Level. The maximum return at maturity is 42% gross (6.01% AER) of the amount you designated to Option Two. Therefore, if the Final Index Level is more than 21% above the Initial Index Level, you will not benefit from this rise and will receive the maximum return of 42% gross (2 x 21%). For example, if the Final Index Level is 50% above the Initial Index Level, you will receive the maximum return at maturity of 42% gross (2x 50% = 100%, which is reduced to the maximum return of 42%) of the amount you designated to Option Two. Option Three - High Growth Outlook If the Final Index Level is the same as or less than the Initial Index Level, you will not receive a return at maturity. You will receive only the amount you designated to Option Three. If the Final Index Level is greater than the Initial Index Level, you will receive the amount you designated to Option Three plus a return at maturity that is equal to 1.01 times the percentage by which the Final Index Level is greater than the Initial Index Level. The maximum return at maturity is 66.66% gross (8.88% AER) of the amount you designated to Option Three. Therefore, if the Final Index Level is more than 66% above the Initial Index Level, you will not benefit from this rise and will receive the maximum return of 66.66% gross (1.01 x 66%). For example, if the Final Index Level is 70% above the Initial Index Level, you will receive the maximum return at maturity of 66.66% gross (1.01 x 70% = 70.70%, which is reduced to the maximum return of 66.66%) of the amount you designated to Option Three. 7

8 Examples of return The table below illustrates some possible outcomes at maturity for each of the three options. Any return is dependent on the performance of the Index and the options you select. These figures are given as examples only, in order to illustrate how each option under the Plan works. What is the AER? AER means the Annual Equivalent Rate. The AER illustrates what the interest rate would be if paid and compounded each year. Original Deposit designated to the option Change in the FTSE 100 Index (comparing the Final Index Level against the Initial Index Level) Return received at maturity (gross) Total amount received back (including the amount you designated to the option) at maturity (gross) Option One Low Growth Outlook 10,000 75% 31.50% 13, ,000 50% 31.50% 13, ,000 30% 31.50% 13, ,000 20% 31.50% 13, ,000 10% 31.50% 13, ,000 0% 31.50% 13, ,000-10% 31.50% 13, ,000-20% 0.00% 10, ,000-30% 0.00% 10, Option Two Medium Growth Outlook 10,000 75% 42.00% 14, ,000 50% 42.00% 14, ,000 30% 42.00% 14, ,000 20% (20% x 2) 40.00% 14, ,000 10% (10% x 2) 20.00% 12, ,000 0% 0.00% 10, ,000-10% 0.00% 10, ,000-20% 0.00% 10, ,000-30% 0.00% 10, Option Three High Growth Outlook 10,000 75% 66.66% 16, ,000 50% (50% x 1.01) 50.50% 15, ,000 30% (30% x 1.01) 30.30% 13, ,000 20% (20% x 1.01) 20.20% 12, ,000 10% (10% x 1.01) 10.10% 11, ,000 0% 0.00% 10, ,000-10% 0.00% 10, ,000-20% 0.00% 10, ,000-30% 0.00% 10,

9 Worked example These scenarios are designed to illustrate the potential impact of designating your Deposit across more than one option. Scenario 1 You originally deposit 30,000 into the Plan and designate your whole Deposit to Option Two. If the Index were to rise by 20% you would receive 42,000 gross at maturity. Scenario 2 You originally deposit 30,000 into the Plan and designate 10,000 equally to each of the three options. If the Index then rises by 20% you would receive 39,170 gross at maturity. However, in this scenario if the Index were to fall by 10%, you would receive back your original Deposit of 30,000 only and no return. However, in this scenario if the Index were to fall by 10%, you would receive 33,150 gross at maturity. The returns in respect of each option are shown graphically in the illustration below. Examples of return illustration 75% Return received at maturity (gross) 70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% -50% -45% -40% -35% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% Change in the FTSE 100 Index (comparing the Final Index Level against the Initial Index Level) 75% Option One - Low Growth Outlook Option Three - High Growth Outlook Option Two - Medium Growth Outlook The returns stated are gross of any tax. It is expected that returns outside of an ISA may be subject to income tax. See Types of investment on page 12. 9

10 About the FTSE 100 Index Your investment is dependent on the performance of the FTSE 100 Index over the life of the Plan. This Index is made up of the largest 100 companies by market capitalisation listed in the UK on the London Stock Exchange and currently includes household names such as Tesco, Vodafone and Unilever. Market capitalisation is a measure of the size of a company. It is calculated by multiplying the number of shares in a company by the current share price. The share prices of these companies will change, so the level of the FTSE 100 Index will rise and fall. Historical performance of the Index Index Level Mar Mar Mar Mar Mar Mar 2012 FTSE 100 Index Source: Bloomberg, 1 March Please note: past performance should not be used as an indicator of future performance. Key considerations when investing in products linked to the FTSE 100 Index The Index may be postponed or terminated if the shares that make up the Index are not published, or where, for example, the relevant stock exchange fails to open or suspends or stops trading. Following the occurrence of these market disruption events, or other events that cause the index to be adjusted, RBS plc has the discretion to make certain decisions, calculations and corrections which may apply to the Deposit, though RBS plc must always act in good faith when making any decisions, calculations or corrections. Should the Index cease to exist, any product linked to the Index may be restructured or may terminate early. This may have a negative impact on the return on any investment in such a product. If any of these events occur, RBS plc may, as deposit taker, adjust the calculation of payments or defer payments under those Deposits. 10

11 What are the risks? Because your money will be placed on deposit with RBS plc, in the unlikely event that RBS plc were to default or go bankrupt, you could lose some or all of your original Deposit and any potential interest. If this occurs you may be entitled to compensation from the FSCS. See page 17 for more information. Whether or not you receive any return on your Deposit is dependent on the performance of the FTSE 100 Index. You may only receive back the amount you originally designated to each option (subject to the risk described above). The potential returns limit your exposure to the performance of the Index and could mean you receive back less than the actual performance of the Index. - Option One - Low Growth Outlook - If the Index rises by more than 31.5%, you will not benefit from any additional rise in the Index and will receive the maximum return of 31.5% gross (4.66% AER). - Option Two - Medium Growth Outlook - If the Index rises by more than 21%, you will not benefit from any additional rise in the Index and will receive the maximum return of 42% gross (6.01% AER). - Option Three - High Growth Outlook - If the Index rises by more than 66%, you will not benefit from any additional rise in the Index and will receive the maximum return of 66.66% gross (8.88% AER). See pages 7 and 8 for further details regarding each option in the Plan. The Index is linked to a collection of underlying company shares in the UK. Prices of these shares can move up and down very quickly and may be negatively affected by global economic, financial and political developments. You are not investing directly in the underlying company shares to which the Index provides exposure and therefore you will not receive dividends. If you decide to terminate the Plan before maturity, the amount you receive back will be dependent on the early withdrawal value of the Deposit. Each of the three options may have different early withdrawal values. You could get back significantly less than you originally deposited. If the return is not equal to or above the rate of inflation over the life of the Plan, the real value of your Deposit will fall, as your money will buy you less than it would have done when you deposited it. Tax rules may change during the life of the Plan, which may affect the tax treatment of any return you receive. 11

12 Questions Qualifying investors Who can invest? You must be aged 18 or over to apply. You must be UK resident for tax purposes. The Plan is not available for US persons. How much can I invest? The minimum deposit for the Plan is 5,000. Within this, the minimum amount you can designate to each option is 2,000. You can designate your Deposit across as many of the three options as you wish. There is no maximum for Direct Account Deposits, ISA transfers or SIPP/SSAS Deposits. The total 2011/2012 Cash ISA allowance is 5,340. The total 2012/2013 Cash ISA allowance is 5,640. You can use both your 2011/2012 and 2012/2013 Cash ISA allowance for this Plan. Charges What are the charges? All charges applicable to the Plan have already been built into the Plan structure and so have been accounted for in the returns described in this brochure. This means that, if you hold the Plan to maturity, any return will be based on the whole of your original investment. These charges will be no more than 5.25% of your original investment and they incorporate all costs including any commissions payable to your adviser. How much will any advice cost? Out of the charges described above, we will pay a commission, of up to 3% of your Deposit in the Plan, to the adviser who arranged your Deposit on your behalf. You will be given details of the amount paid to your adviser in our confirmation of your Deposit. Types of investment Direct Account You can place a deposit direct into the Plan as an individual or a joint account holder and also as a corporate body, a trust or a charity. ISA If you are ordinarily resident in the UK for tax purposes, you can invest up to a maximum of 5,340 via the Plan into a 2011/2012 Cash ISA and a maximum of 5,640 into a 2012/2013 Cash ISA. The total annual ISA allowance with all providers is 10,680 for the tax year 2011/2012. The total annual ISA allowance for the tax year 2012/2013 is 11,280. This includes any amount you may invest in a Stocks and Shares ISA during the same year. This Plan is only available as a Cash ISA. Another version of the Plan is available if you wish to invest in a Stocks and Shares ISA. You can use both your 2011/2012 and 2012/2013 tax year Cash ISA allowance for this Plan (provided you do not have any other Cash ISA for the relevant tax year). If you designate your Deposit across more than one option under the Plan, and your total deposit in the Plan exceeds the ISA limits detailed above, you will need to specify on the relevant application form as to which option(s) you want to be placed in an ISA. Any amount you wish to deposit that exceeds the ISA limits will need to be deposited as a Direct Account and will be subject to the minimum deposit amounts (see How much can I invest? ). 12

13 You can transfer all or part of any existing Cash ISA above 5,000 into this Plan. If you transfer a Cash ISA you opened in this tax year then you must transfer the full amount. Your existing provider may make a charge for transferring your ISA. It is important that we receive your ISA transfer funds by the 8 June If we receive your ISA transfer funds after this date we will return the cheque to your original ISA manager. SIPP/SSAS You can invest pension monies via a Self Invested Personal Pension (SIPP) or Small Self Administered Scheme (SSAS). RBS plc places no limit on the maximum Deposit. Tax How will my investment be treated for tax purposes in the UK? Tax treatment depends on individual circumstances and may be subject to change in the future. These statements are not intended to be, nor should they be, regarded as legal or tax advice and you should consult your tax adviser to obtain advice about the particular tax treatment in relation to this Plan, particularly if you may be subject to tax in other jurisdictions. Direct Account It is expected, based on our understanding of current tax regulations, that any returns from the Plan for individuals and joint account holders will be treated as interest and may be subject to income tax. Any returns from the Plan for individuals and joint account holders will be paid net of basic rate income tax as required by law. Higher rate or additional rate taxpayers will have further tax to pay. Any returns from the Plan will generally be paid gross if you place a deposit as a corporate body or charity and trusts will be paid gross or net of basic rate tax, depending on the terms of the trust. ISA Any returns from the Plan will be paid gross. Under current legislation, the proceeds of Deposits held within an ISA are not subject to either UK income tax or UK capital gains tax, and any gains or losses on your Deposit will be disregarded for the purposes of the calculation of UK taxes. SIPP/SSAS Any returns from the Plan will be paid gross. 13

14 Making an investment How do I apply? The Plan is only available via your financial adviser and they will explain how to apply for the Plan. Before you invest in the UK Outlook Selector Deposit Growth Plan 2 and select your choice of option(s), it is important that you read and understand this brochure, including the Terms and Conditions. You can only invest in this Plan if your financial adviser has confirmed it is suitable for you. What confirmation of my investment will I receive? Within five Business Days of our receipt of your money and a correctly completed Application Form, we will send you a confirmation that your application has been accepted, though such acceptance is still subject to your financial adviser having satisfied certain conditions before the Initial Valuation Date. If your financial adviser does not satisfy these conditions before the Initial Valuation Date, then we may reject your application after we have initially indicated acceptance to you. In the event of an application being rejected, we will provide notice of rejection and we will notify you and your financial adviser as soon as practicably possible and return your Deposit to you without any interest. We will also enclose details of your right to cancel within 14 days of us accepting your application. What happens to my money before the Start Date? We will place your money in a Client Money account with Lloyds TSB Bank plc. No interest will be paid. Where an application is made to open a 2012/2013 Cash ISA, any subscription monies for that 2012/2013 Cash ISA will be held outside the ISA until on or after 6 April If Lloyds TSB Bank plc were to default or go bankrupt before the Start Date and you suffered a loss as a result of this, you may be eligible to claim compensation from the UK Financial Services Compensation Scheme ( FSCS ). See What are the compensation arrangements? on page 17. What happens to my money on the Start Date? Your money will be placed on Deposit with RBS plc with a fixed Maturity Date. The Deposit has been structured to give the Plan return described earlier in this brochure. The return depends on the ability of RBS plc to pay what it owes you at maturity. Credit ratings What are credit ratings? Credit ratings can be a useful way to compare the credit risk associated with different product providers and related investments. Ratings are assigned by independent companies known as ratings agencies and they are reviewed regularly and are subject to change if the company s circumstances change significantly and the agency considers it necessary. Fitch s ratings range from AAA (Most Secure/Best) to D (Most Risky/Worst), Moody s ratings of these companies range from Aaa (Most Secure/Best) to C (Most Risky/Worst) and Standard & Poor s ratings range from AAA (Most Secure/Best) to D (Most Risky/Worst). A rating outlook indicates the likely rating trend over a one to two-year period. It reflects financial or other trends that have not yet reached the level that would trigger a rating change, but which may do so if such trends continue. A stable outlook means that the rating is unlikely to change in the short term. A negative outlook means that the rating may be lowered in the near future. A rating under review - down outlook means that the rating is being reviewed by a rating agency for a possible downgrade. The credit rating is not investment advice and should not be seen as a recommendation to purchase, sell, or hold a financial obligation from a particular financial institution. Credit ratings are simply one factor that you can look at when making a decision on whether to make a particular investment. A rating is not a guarantee that a particular institution cannot fail. The credit rating is not investment advice and should not be seen as a recommendation to purchase, sell, or hold a financial obligation from a particular financial institution, they are simply one factor that you can look at when making a decision on whether to make a particular investment. A rating is not a guarantee that a particular institution cannot fail. 14

15 What are the current RBS plc credit ratings? On 1 March 2012 RBS plc is rated A, with a stable outlook, by Fitch, A2, with a rating under review - down outlook, by Moody s and A, with a stable outlook, by Standard & Poor s. For the latest information on the RBS plc credit rating please visit: After making an investment How will you keep me up-to-date with my Plan? We will send a statement twice a year in April and October to the address you have given us. Should you wish to find out any other information regarding your Plan, please contact your financial adviser or contact us, see Contacts on page 18. Can I change my mind before the Start Date? You can change your mind within 14 days of the day you receive confirmation that your application has been accepted. To do this you must complete and return the cancellation form which is enclosed with your confirmation. If you do choose to cancel your Plan, simply fill out the cancellation form and return it to us at the address under Contacts. If you have designated your Deposit across more than one option, you can choose to either cancel your whole Plan (and so all of your options) or, alternatively, one or more of your individual options. In this case, you will need to specify which option(s) you wish to cancel. If you cancel the Plan, or if you elect to cancel one or more designated options in the Plan (where applicable), and we receive your cancellation form before the Start Date, we will return your original Deposit in the Plan, or the amount that you have designated to the particular option, without any interest. If you choose to cancel one or more of your designated options, your remaining Deposit in the Plan will still be subject to the minimum investment amounts detailed under How much can I invest? on page 12. If we receive your cancellation form on or after the Start Date we will return the early withdrawal value of the Plan, or the particular option if applicable, which may be significantly less than your original investment, as described more fully in Can I withdraw my money before maturity?. If you cancel an ISA or ISA transfer there is a risk that the ISA status of your Deposit will be lost. In our cancellation form we will ask you what you would like us to do with the funds. If you do not cancel your money will remain invested in the Plan. Can I withdraw my money before maturity? The Plan is designed to be held for the full six year period until the Maturity Date, however you can withdraw all or part of your Deposit early if you need to. There will be two Valuation Dates each month, on the 8th and 21st, when you can withdraw money from the Plan, or, if you have designated your Deposit across more than one option, you can withdraw money from the individual options that you have selected. In order to meet these dates we must receive your request by 12 noon on the Business Day immediately before the Valuation Date. Although you will not be charged any fee by RBS plc for withdrawing your investment before the Maturity Date, if you do withdraw early, you should be aware that we shall need to terminate contracts that we have entered into. Early termination of these contracts, which we put in place for each investment, will mean that, if you withdraw all or part of your investment before the Maturity Date, it is likely you will receive less than the value at maturity and you may well receive less than your original investment. You should be aware before making a withdrawal request that this shortfall could be significant. 15

16 The amount you receive on any withdrawal (all or part) will be based on the early withdrawal value of the particular option(s) that you have selected through your Plan on the Valuation Date we process your request and not on the early withdrawal value of the particular option(s) that you have selected on the day we receive your withdrawal request. RBS plc must always act in good faith when calculating the early withdrawal value of the option(s) that you have selected through your Plan and will take into account relevant factors including, amongst others: how long there is to the Maturity Date, the market conditions prevailing on the relevant Valuation Date, for example, what the current level of the Index is and what current interest rates are, and the costs we incur in terminating the contracts. You can withdraw amounts equal to 1,000 or more from each option you have designated your Deposit into but, if you do want to keep the Plan open, you must leave at least 1,000 designated to at least one option in the Plan. If you have designated your Deposit across more than one option, you will need to specify which option(s) you want to withdraw money from and how much you would like to withdraw from each option. If you want to transfer your ISA to another provider, the full ISA amount must be transferred, but such amount will be subject to the adjustments described above. Partial transfers are not permitted. What happens if I die before the Plan matures? If you die before the Maturity Date, the Plan will become part of your estate. Your personal representatives will need to contact us in order to let us know how they wish to proceed with the Plan as part of probate/administration. If you made a Direct Account Deposit, your Plan will remain open until we have received instruction from your personal representatives. If you made an ISA Deposit, your ISA will lose its ISA tax status and will be closed automatically. The Plan will be continued as a Direct Account Deposit until we receive instructions from your personal representatives. Your representatives will have two options: Close the Plan with the proceeds paid to your representatives. The value they receive will be subject to the current early withdrawal value of the option(s) that you have selected through your Plan so they may receive back less than you originally deposited. Keep the Plan open and transfer it to a named beneficiary(ies) to continue the Deposit until maturity. If your representatives choose this option, the beneficiary(ies) must read and agree to the Terms and Conditions as detailed in this brochure. What happens at maturity? On the Final Valuation Date, we will calculate the total return due to you. Prior to the Maturity Date we will write and inform you of the options that are available to you. After we receive your instructions, we will process them and endeavour to meet your request within 5 Business Days of the Maturity Date or receipt of your instructions if later. Until we receive your instructions, we will hold your money in a Client Money account with Lloyds TSB Bank plc. No interest will be paid. If we do not receive your instructions within a reasonable time we may return your money to your nominated bank or building society account. 16

17 Further questions Do you provide additional support to advisers? We may provide advisers with support to help improve their service to you. This could include training, seminars and/or marketing materials. For specific details on any support provided, please contact your adviser or us. What are the compensation arrangements? The compensation arrangements will differ depending on which of the two time frames headed in the table below applies. Please be sure to read both sections carefully. Before the Start Date and after the Maturity Date During these periods your money will be held in a Client Money account at Lloyds TSB Bank plc. If during these times, Lloyds TSB Bank plc defaults or becomes bankrupt and you suffered a loss as a result of this, you may be eligible to claim compensation from the Financial Services Compensation Scheme (the FSCS ), up to 85,000. In the event that RBS plc itself defaults or becomes bankrupt during these periods your money will be returned to you as it is being held as protected Client Money segregated from RBS plc assets. From the Start Date to the Maturity Date For the duration of the six year period until the Maturity Date, your money will be held on deposit with RBS plc. If RBS plc defaults or becomes bankrupt during this period you may be eligible to claim compensation from the FSCS, up to 85,000. The Financial Services Compensation Scheme The FSCS can pay compensation to depositors if a bank or building society is unable to meet its financial obligations. Most depositors, including most individuals and small businesses are covered by the scheme. In respect of Deposits, an eligible depositor is entitled to claim up to 85,000. For joint accounts each account holder is treated as having a claim in respect of their share so, for a joint account held by two eligible depositors, the maximum amount that could be claimed would be 85,000 each. The 85,000 limit relates to the combined amount of all the eligible depositor s accounts with a bank or building society, including their share of any joint account, and not to each separate account. You can find more information about the FSCS (including eligibility to claim) on their website, or by calling What if I want to complain? If your complaint relates to the advice you received when purchasing the Plan, please contact your financial adviser. If you have a complaint about any aspect of the service we have provided, please contact us at: The Royal Bank of Scotland plc, BNY Mellon House, Ingrave Road, Brentwood, Essex CM15 8TG, or call us on Copies of our complaint handling procedure are available, from the above contact details, on request. If you are unhappy with the way we have handled your complaint you can contact the Financial Ombudsman Service who may take the matter up on your behalf: Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London E14 9SR. 17

18 Contacts The Royal Bank of Scotland plc If you have any queries please contact us at: The Royal Bank of Scotland plc BNY Mellon House Ingrave Road Brentwood Essex CM15 8TG Tel: Lines are open between 9am and 5pm Monday to Friday. Calls may be recorded for training and monitoring purposes. Regulator RBS plc is authorised and regulated by The Financial Services Authority. Its address is: The Financial Services Authority 25 The North Colonnade Canary Wharf London E14 5HS We are entered on their register under number You can check this at: or by contacting them on About The Royal Bank of Scotland plc The Royal Bank of Scotland plc is a subsidiary of The Royal Bank of Scotland Group plc. The Royal Bank of Scotland Group plc is one of the world s foremost financial services companies. We work closely with our personal, commercial and large corporate and institutional customers to address their financial needs. Internationally, the RBS Group s brands include The Royal Bank of Scotland and RBS Coutts and NatWest in the UK, Citizens and Charter One in the United States and other well known financial services providers. This item can be provided in Braille or large print, please call us on to request this. For general queries, text phone users can contact us (using the Typetalk service) by prefi xing our number with

19 Terms and Conditions Please read these Terms and Conditions carefully and keep them for future reference. They provide you with important information about the Plan and, together with the Plan brochure and the deposit programme, they form the agreement between you and us. When you sign the Application Form you are agreeing to these Terms and Conditions. The law which we take as the basis for establishing relations with you prior to the conclusion of the agreement is also the law of England. If you open a Plan via a wrapper platform (where permitted by RBS plc) then certain references to you in these Terms and Conditions, will be references to, you or the platform as your nominated agent, where applicable. Definitions Account The deposit account opened by RBS plc for your Deposit. An Account may be either a Direct Account or an ISA Account. AER - Annual Equivalent Rate. This illustrates what the interest rate would be if paid and compounded each year. Application Form The application form to invest in the Plan, either via an ISA or Direct Account, and can include a Transfer Application Form. Business Day Any day (other than Saturday or Sunday) on which banks are open for business in the UK. Cash ISA An Account established in accordance with the ISA Regulations and consists of a cash component only. Client Money Money held in accordance with the provisions of the FSA s Client Assets Sourcebook relating to client money. Deposit The initial deposit or the amount transferred from another Cash ISA deposited in the Account. Deposit Taker In this case RBS plc is the licensed deposit taker. Direct Account Any part of the Deposit that is not part of an ISA. Final Index Level The average of the closing levels of the Index on the 20th of each month from, and including, 20 June 2017 to, and including, 20 June 2018 (13 monthly observations in total), or the next Business Day when not a Business Day, subject to adjustment in accordance with the provisions of the deposit programme as set out on page 10 of this Plan brochure. Final Valuation Date The date when we calculate the Final Index Level and the Maturity Value, which will be 20 June 2018, subject to adjustment in accordance with the provisions of the deposit programme as set out on page 10 of this Plan brochure. FSA The Financial Services Authority, or any successor organisation. FSA Rules The FSA s Handbook of Rules and Guidance, as amended from time to time. FSCS The Financial Services Compensation Scheme, or any successor organisation. Gross - The interest rate paid before the deduction of tax. HMRC Her Majesty s Revenue & Customs. Index The FTSE 100 Index which is made up of 100 of the largest companies by market capitalisation listed on the London Stock Exchange. Initial Index Level The closing level of the Index on the Initial Valuation Date. Initial Valuation Date The date when we calculate the Initial Index Level, which will be 20 June 2012, subject to adjustment in accordance with the provisions of the deposit programme as set out on page 10 of this Plan brochure. ISA An Individual Savings Account, which is a scheme of investment managed in accordance with the ISA Regulations by the ISA Manager under terms agreed between the ISA Manager and the investor. ISA Account An Account opened by RBS plc in accordance with the ISA Regulations. ISA Investments Any assets, including the Deposit, within the ISA at any time. ISA Manager The person who is approved to administer an ISA, and in respect of an ISA related to the Plan, means The Royal Bank of Scotland plc. ISA Regulations The Individual Savings Account Regulations 1998, as amended or replaced from time to time. Maturity Date The date on which your Deposit and any additional return due to you is paid into a Client Money account, pending your further instructions, and which will be 27 June 2018, subject to adjustment in accordance with the provisions of the deposit programme as set out on page 10 of this Plan brochure. Maturity Value The final value of the Deposit (together with any interest), calculated as set out in the Plan brochure. Plan The UK Outlook Selector Deposit Growth Plan 2, comprising the deposits placed through your ISA and/or your Direct Account, as specified in your Application Form(s). Plan Manager The company which is responsible for the administration of the Plan, which in this case is The Royal Bank of Scotland plc. Start Date The date on which the Deposit is placed with RBS plc, which will be 27 June Transfer Application Form An application form to transfer your investment in an existing ISA to an ISA Account under the Plan. Valuation Date The two days per month when you can withdraw money from the Plan and which will be the 8th and the 21st of each month (or the next Business Day when not a Business Day). We, us, our and RBS plc The Royal Bank of Scotland plc. We are a member of The Royal Bank of Scotland Group plc (the RBS Group ). For information about our group of companies, please visit and click on About Us. 19

20 1. Application 1.1 The Royal Bank of Scotland plc is authorised and regulated by the FSA. Under these Terms and Conditions, we act as both Plan Manager (which means that we are responsible for the administration of your Plan) and as ISA Manager (which means that, where you invest via an ISA, we administer your ISA). 1.2 You may open a Plan on the terms of the Plan brochure, the deposit programme and these Terms and Conditions. To open a Plan, you should complete the relevant Application Form (either ISA or (non-isa) Direct Account) and send it to the address on the relevant Application Form. 1.3 Upon receipt of a duly completed Application Form and cheque (where required), the Plan Manager may accept your application subject to these Terms and Conditions, and subject to your financial adviser having satisfied various procedural requirements relating to the Plan. Completed Application Forms and payments must be received by the deadlines specified in the Plan brochure. We reserve the right to reject an application for any reason, including, specifically, a failure by your financial adviser to meet our requirements before the Initial Valuation Date. Since this failure may take place after the deadlines relating to the receipt of your completed Application Form and payments specified in the Plan brochure, we will provide notice of rejection after such deadlines and therefore after we have initially indicated acceptance to you. In the event of an application being rejected, we will notify you and your financial adviser as soon as practicably possible and return your Deposit to you without any interest. 1.4 Within 5 Business Days of accepting your application, we will confirm your application to open a Plan and confirm the date on which the Deposit was made. 1.5 Money held by RBS plc prior to the Start Date AND then, between either early termination or final redemption at the Maturity Date and final settlement with you, will be held by RBS plc as Client Money in an account with a third party bank appointed by RBS plc for these purposes. No interest will be payable on such Client Money balances held by the third party bank. The third party bank for the Plan will be Lloyds TSB Bank plc. 2. ISA Accounts 2.1 You must subscribe to your ISA with either your own money or by the transfer of the proceeds of an existing ISA already held by you. Where an application is made to open a 2012/2013 ISA Account, any subscription monies for that 2012/2013 ISA Account will not be held within the ISA until on or after 6 April Transfers of existing ISAs will normally be arranged by us with the existing Cash ISA manager(s) following our receipt of a Transfer Application Form from you, at which point we will contact your existing ISA manager(s) to arrange the transfer for you. Once the proceeds from the existing ISA have been transferred, your ISA will be subject to these Terms and Conditions. 2.2 To effect an ISA transfer you should complete a Transfer Application Form and send it to the address on the form. A cancellation notice will be sent to you upon our acceptance of your Transfer Application Form. 2.3 You may instruct RBS plc to transfer to another approved ISA Manager the whole of your ISA, subject to and in accordance with the ISA Regulations. Transfers will be processed by RBS plc in accordance with clause 12 within 5 Business Days of the relevant Valuation Date so long as valid instructions have been received by 12 noon on the Business Day prior to that Valuation Date. 2.4 You will immediately inform us in writing if you cease to be a qualifying individual for the purposes of the ISA Regulations. We will notify you if, by reason of any failure to satisfy the provisions of the ISA Regulations, an ISA has, or will, become void. Where an ISA becomes void for any reason, in the absence of instructions otherwise from you, we will continue to hold the Deposit, but in a Direct Account and you will lose any favourable tax treatment applicable. 2.5 We shall not accept any further amounts into an ISA if the ISA Regulations no longer give you the right to invest in that ISA. 2.6 Any ISA Investments shall be in, and must remain in, your beneficial ownership and must not be used as security for a loan. 3. Taxation 3.1 Under current legislation, a Deposit held within an ISA is not subject to UK Income Tax and any income on your Deposit will be disregarded for the purposes of the calculation of UK taxes. 3.2 Where, however, your Deposit is held through the Direct Account (and therefore not subject to the ISA tax shelter) you may be subject, depending on your personal circumstances, to UK tax on any income received. These statements are based on current legislation, regulations and practice, all of which may change. 3.3 Where any deduction or withholding for or on account of tax is required by law (a Tax Deduction ) from any amount otherwise payable, we shall be entitled to make such Tax Deduction and shall not be required to make any increased payment to compensate you for such Tax Deduction. 3.4 If you are an individual ordinarily resident in the UK, eligible to be paid interest gross of tax, and wish to be paid interest gross of tax on a Direct Account, you can download an R85 form from HM Revenue & Custom s website at and send us your completed R85 form at: RBS Administration, BNY Mellon House, Ingrave Road, Brentwood, Essex CM15 8TG, together with a covering letter stating your customer reference. 20