How does the principal guarantee for Market+ work?

Modified on Thu, 27 Jun at 3:09 PM

A Market+ program is principal guaranteed if held for the complete 3-year term. When a program is started, the majority of the deposit is placed in a guaranteed interest rate product which will accrue yields by maturity that equal the initial deposit and pay the 4.20% annual guaranteed return. This allocation guarantees that regardless of the performance of your market investment portfolio at least you will earn a 4.20% annual return and your initial deposit will be returned at maturity.

Market+ allocates your deposit to cash, market investments, and guaranteed interest-rate products. The combination of the allocation to the guaranteed interest rate product and its annual accrued interest is designed to guarantee your deposit by the end of the 3-year period. As a result, regardless of your market investments’ performance, your principal is guaranteed if held until the end of the period. This hypothetical illustration shows an example of what could happen to a $100,000 deposit in the Market+ program.

This is a hypothetical illustration and does not represent actual performance. Past performance is not indicative of future performance.

Guaranteed Interest Rate Product
Market+ achieves principal guarantee by allocating a portion of your deposit to a guaranteed interest-rate product. In this illustration, $92,500 is placed in a guaranteed interest rate product whose interest rate is 5.80%. The interest earned over the 3-year term will grow the guaranteed interest rate product allocation to equal $100,000 by the end of the 3-year program.

Market Investments
The Market+ program yield is based on the performance of the investments in your selected portfolio.  In this illustration, $6,350 of the Market+ deposit is allocated to market investments.  For illustration purposes, assuming the account grows to equal $15,000⁵ by the end of the 3-year investment term. 

Cash 
Market+’s investment program allocates a small portion of your deposit to cash.  In this illustration, $1,150 has been allocated.

Guaranteed Return
Market+ has a guaranteed return at the end of each term year. In this illustration, the guaranteed return rate is 3.00% (4.20% is the other option for the Market+ guaranteed return rate). Thus the return to you at the end of each year will be $3,000 and over the lifetime of the product the return will be $9,000.