iDAD Callable Deposit Plan Issue 10

The iDAD Callable Deposit Plan is a maximum 8 year and 2 week plan that offers potential growth of 10% for each year the plan runs, subject to the performance of the FTSE 100 Index.

Term

A maximum 8 years 2 weeks investment

Underlying index

FTSE 100 Index (the ‘Index’)

Deposit Taker

Goldman Sachs International Bank

How the Callable Deposit plan works

This is a 8 year 2 week Deposit Plan based on the performance of the FTSE™ 100  Index. The Deposit Plan is constructed to offer a potential return of 10% per annum to the redemption date if the Deposit Taker calls the investment early (please refer to the ‘Callable Feature’ below), or 200% participation in any growth of the FTSE™ 100  Index at maturity.

If the Deposit Plan is not called early, at maturity, the investor receives a return of  200% of any positive growth in the FTSE™ 100 Index. For example, at maturity, if the  FTSE™ 100 Index had risen 10% from the Initial Index Level, the investor will receive  100% of their investment back plus a 20% growth payment (10% X 200%).

The opportunity for full capital protection and enhanced growth is the key aim of this  investment. The investment is linked to one of the best-known indices in the world (see page 5 of the brochure for full details) and investors will benefit from geared growth in  the Index unless, the Deposit Taker, Goldman Sachs International Bank (GSIB) “calls”  the deposit early, in which case investors will be paid a very competitive fixed rate of  return – considerably better than current cash rates. The enhanced participation is  designed to more than make up for the loss of dividends a direct investor into the  Index would benefit from, and although the returns are effectively capped, because the deposit is very unlikely to deliver more than the 10% per annum coupon rate, the cap is at an attractive level relative to current interest rates.

The initial investment, minus any initial Adviser Fee, will be returned in full on the  Maturity Payment Date, or if GSIB calls the Deposit Plan early,regardless of the  performance of the Index, as detailed in the Key Observations table on page 4 of the brochure.

The Callable Feature

On each quarterly Observation Date, from the second anniversary onwards, the  Deposit Taker has the option to ‘call’ the Deposit Plan at their discretion. This means  the Deposit Plan will be redeemed at that point and investors will receive their Initial  Capital into the Deposit Plan, together with the fixed rate of return detailed above. For  example, if the Deposit Taker called the Deposit Plan on the second anniversary, the  investor would receive 100% of their Initial Capital plus a 20% return.

The callable feature provides GSIB with the ability to redeem the Deposit Plan early on  any Callable Observation Date, details of which can be found on page 2 of the brochure under ‘Product Information’.

The main reason this may happen is because GSIB believes the enhanced growth  participation that could be paid out at maturity, may be higher than the coupons that  have accumulated so far. It works in a very similar way to having a cap on the  maximum pay-out.

For example, if after 4 years the Index has grown by 25% and seems set to continue  growing, the Deposit Taker may feel that they will be better off redeeming the Deposit  Plan and paying 4 years of the fixed annual return, rather than potentially paying the  Index related return once the Deposit Plan matures.

Although this feature allows the Deposit Taker to avoid paying very high returns, the  fixed annual return is set at a rate that is attractive, particularly when combined with  the capital protection feature.

How can I hold this?

Direct, ISA/ISA Transfers, SIPPs, SSAS,Corporate, Charities and Trusts