Guaranteed Income Bond Product Guide
In this guide Contents Get the facts The Guaranteed Income Bond 3 Who is the Bond for? 3 Why is this a good investment? 3 Key Features of the Guaranteed Income Bond 4 Your questions answered 5
Contact us today After reading this document if you have any questions: Call us on 0800 051 1867 Customers with hearing and speech impairments can contact us by Minicom 0800 404 6160 Our lines are open Monday to Thursday 8am-8pm, Friday 8am-6pm, Saturday 9am-5pm (excluding public holidays). Calls may be recorded. Speak to your Financial Adviser
Law The laws of England will apply to this Bond. All information in this leaflet is based on our understanding of current law and HM Revenue & Customs practice. The terms and conditions given in this leaflet are those which applied at the time of publication. Queries and complaints If you wish to complain about the advice you have received, please contact: Customer Concerns Unit, PO Box 833, Trinity Quay, Avon Street, Bristol BS99 5TY Tel: 0117 940 3666, e-mail address: ccuadvice@rbs.co.uk Your Bond is designed, issued and managed by Royal Scottish Assurance plc, the life assurance, pensions and investment company of The Royal Bank of Scotland plc. If you want to complain about the service you receive from Royal Scottish Assurance, please write to: Royal Scottish Assurance, Customer Services, PO Box 886, Bristol BS99 5LJ. You may also refer complaints to the Financial Ombudsman Service at South Quay Plaza, 183 Marsh Wall, London E14 9SR (Tel: 020 7964 1000). This won't affect your legal rights. RBS is a member of the Financial Services Compensation Scheme (FSCS). The Scheme can pay compensation to customers if they are eligible and a regulated firm is unable to pay claims against it, usually if the firm stops trading or is insolvent. You will normally be covered for 100% of the first 2,000 plus 90% of the remainder of the claim, without any upper limit (with effect from 1/1/10 maximum 90% of the claim, without any upper limit). Most retail consumers (this includes private individuals and some small businesses) are eligible under the Scheme. For further information on the conditions governing compensation and details on how to apply please refer to the FSCS at www.fscs.org.uk Authorised and regulated by the Financial Services Authority. Royal Scottish Assurance plc. Registered Office: 24-25 St Andrew Square, Edinburgh EH2 1AF. Registered in Scotland Number 119820. Web Site: www.rbs.co.uk 02089 21/09/2009
Get the facts The Guaranteed Income Bond The Guaranteed Income Bond is a fixed term lump sum investment bond. The Bond guarantees you a fixed income and the return of your original investment at the end of the fixed term. Who is the Bond for? The information provided in the following table may help you decide if the Bond could be right for you. May be suitable if: You are happy to keep your money invested for the full term of the Bond investment You want to make sure your original investment is secure You want to benefit from a fixed, regular income Not suitable if: You need access to your money during the term of the Bond You are under 18 or over 79 You are a non-tax payer Why is this a good investment? You are guaranteed the return of your original investment at the end of the term. You are guaranteed a fixed level of income throughout the term. If you die during the term, we will return your original investment or the value of your Bond at the time, whichever is greater. Your Bond will then end. 3
Key Features of the Guaranteed Income Bond The Financial Services Authority is the independent financial services regulator. It requires us, the Royal Bank of Scotland to give you this important information to help you decide whether Guaranteed Income Bond 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. Its aims To provide a guaranteed level of income for an agreed fixed period. To provide a guaranteed return of your original investment at the end of the term. Your commitment Stay invested for the full term of the product. Your risks if you choose to invest This investment is not designed to be cashed-in before the end of the term. If you do cash it in early, the sum payable will reflect the value at the time of the underlying assets held to provide the income payments and you may not get back your original investment. Don t forget that inflation will reduce the buying power of your money in the future. After you have made your investment, we will send you a notice of your right to cancel the Bond. If you choose to cancel the Bond you may get back less than the amount you invested. There may be some time between us receiving your investment and the issue date of your Bond. The issue date is the date that the fixed period will start from. Your investment will not receive any interest during this time. Your income rate is guaranteed not to change during the term of your Bond. However, interest rates, available elsewhere, could rise above the fixed income rate you receive from your Bond. The income payments and the final return from your Bond could be subject to tax (depending on your personal circumstances) and this may affect the net return you receive from your Bond. (See What is the tax position? on page 6.) Your returns are based on existing tax laws and any future change to these could affect the amount you receive. Please note that if you have not received advice from the Royal Bank of Scotland you should make sure this Bond is suitable for your needs. For details of what you can expect to receive at maturity or if you cash in early, please see the example illustration contained within the Details of Terms which forms part of these Key Features. 4
Your questions answered Who provides the Bond? The Bond is provided by Royal Scottish Assurance plc. When and how will I receive income? The income dates are set out in the Details of Terms document. We will pay your income directly into your specified bank account and it could take up to 10 working days to arrive. If the payment date falls on a weekend or non-banking day, we will pay the income on the nearest available banking day. Can I add more money into my Bond? You cannot make additional payments into your Bond. Can I cash in my Bond? This investment is not designed to be cashed in until the end of the term. If you do decide to cash in your Bond during the term you may not get back your original investment. Partial encashments are not permitted. What happens to the Bond if I die? If you die before the end of the term, we will pay out the greater of your original investment and the current value of your Bond. Your Bond will then end. For joint investments the Bond will continue unless you both die during the term in which case it will pay out as described above. 5
What is the tax position? You have no personal liability to basic rate income tax or capital gains tax on the proceeds from your Bond, because we pay tax on the funds and this is already taken into account in the income rate. This means there s no additional personal liability to basic rate income tax or capital gains tax on the proceeds from the Bond. Your income from the Bond could make you a higher rate taxpayer. You should consider this carefully, especially if you are already close to the higher rate tax band. If you pay the higher rate of tax, you ll have to pay income tax on any income from the Bond, but only at the rate of the difference between the basic and higher rates. If you are a non-tax payer you cannot reclaim any tax, even though the investment is paid into a fund on which we pay tax. If you have a higher tax allowance, for example, because of your age, you could lose some or all of this extra allowance as a result of any income you take. Other allowances and benefits, such as the Child Tax Credit, can also be affected when you receive an income. Will my benefits be affected by any changes in tax rules? The cash value of the Bond will depend on the tax we pay on the funds in which the Bond is invested. If the current tax rules continue to apply, your benefits will not be affected. However, if tax rules change this may affect the cash-in value of your Bond although the return of your original investment at the end of the term is still guaranteed. Tax laws can be complex. If you need more help or information, please ask your adviser. You should remember that tax rates and rules can change. Any liability to additional tax will depend on your circumstances. What happens if I change my mind? If you decide to cancel your investment before the issue date of the Bond you will receive all your money back. After this date, we will send you a cancellation notice. If you decide you don t want to invest, you should complete and return the cancellation notice to us within 30 days of receiving it. If you cancel within the 30 day period, we will return all your money, less any fall in the investment value during this period. You may get back less than you paid in. 6