DESCRIPTION

A Smart Way to Invest in the U.S. Large Cap Market

AMERICAN MARKET™ Index-Linked Term Deposit blends a guaranteed investment product with the capacity to generate market-like gains. Investors have the potential to achieve an unlimited return with the comfort of knowing there is no risk to their principal! This 5-year investment is linked to the performance of the S&P 500® Index.

TARGET AUDIENCE

This product will be attractive to those members who want the potential to earn a higher rate of return, without risking their principal.
There are three main target markets:

• 26 – 69 year olds for RRSP and Non-registered term deposits
• 26 – 39 year olds, plus grandparents for RESP deposits *
• Age 69 + for RRIF investments **

*Not all credit unions are participating in the CUDP RESP program with Concentra Financial. Therefore, the marketing material does not refer to RESP eligibility for these products. Should your credit union be interested in customizing the index/equity-linked marketing material to include RESP, contact SaskCentral, MarketSolutions

**Index/equity linked products are RRSP and RRIF eligible; however, RRIFs should only be set up if the member has other non-linked RRIF monies to satisfy their payments. Just because it is eligible as a RRIF, it does not mean that your credit union must offer it this way. There are several things to consider. For more information on offering RRIF Index-Linked term deposits, please contact MarketSolutions, SaskCentral.

FEATURES

• 5-year term deposit
• Non-redeemable
• Linked to the performance of the S&P 500® Index
• Offered monthly
• Unlimited return – no cap
• Return calculated on monthly averages throughout length of term
• If average index value is less than when originally purchased, no interest is paid
• Suggested minimum deposit $500
• Eligible for RRSP/RRIF/RESP/non-registered investments
• Qualify for “locked-in” registered plans

KEY BENEFITS

Benefits to Credit Union:

• Attractive investment for “risk-adverse” members
• May assist to improve liquidity position
• Funds are locked in for 5 years
• Monthly offerings and monthly averaging reduce option purchase cost
• Can be used to target several markets – RRSP, RRIF, RESP, non-registered investors
• Marketing material
• Guidebook/Staff training presentation

Benefits to Members:

• No risk to principal investment
• Potential return significantly higher than traditional term deposits
• No limit to potential return
• Low minimum deposit
• No management fees
• Funds stay on deposit at credit union
• Provincial deposit guarantee applies
• One product can be used for several types of investments