Educational Stock Market

• The interest earned is based on the Standard and Poor's 500 Index (S&P 500).
• The principal is insured by the FDIC.
• Minimum initial deposit $500.
• Available term: 5 years.

Additional Information

• Once the instrument is opened, no additional deposits or withdrawals are allowed prior to the maturity date. Withdrawals are only allowed for the beneficiary's post-secondary school education, according to the restrictions imposed by the Treasury Department.
• Penalties for withdrawals or cancellations before maturity during the first year: 30% of the principal; 25% of the principal during the second year; 20% of the principal during the third year; 15% of the principal during the fourth year; and 10% of the principal during the fifth year.
• The following method is used to compute interest: First, the Stock Market value of the S&P 500 Index is obtained on the business day immediately prior to the date of the opening of the account (Initial Index Value). From that moment on, the S&P 500 Index is recorded and maintained as of the date of the final Stock Market business day of each month during the term of the account (End of Month Index Value). At maturity, the averages of the End of Month Index Values during the term are computed by adding the End of Month Values and dividing that sum by 60 to determine the Average Index Value. Then the percentage increase of the S&P 500 Index, if any, is computed by taking the Average Index Value and subtracting the Initial Index Value and dividing the result by the Initial Index Value. If the Average Index Value is equal or less than the Initial Index Value, no interest will be paid.
• If deposits are made or accounts opened using cash or non-cash items (i.e. checks), interest begins to accrue on the business day on which the transaction takes place.
• The interest payable is 1.25 (125%) of the percentage increase in the S & P 500 to a maximum of 40%, with no guarantee of a minimum return at maturity.
• Interest will be computed at a rate based on changes in the Standard & Poor’s 500 over the term and will be computed and credited only at maturity.
• Upon maturity, the account does not automatically become another Educational Stock Market IRA. At maturity it renewed to a fixed interest Educational Contribution Account with a 3-year term at the interest rate the Bank offers at that time regarding Educational Contribution Account deposits for that term.
• "Standard & Poor's", "S&P", "S&P500", "Standard & Poor's 500" and "500" are registered trademarks of Standard & Poor's, a division of McGraw-Hill, Inc. Banco Popular uses each trademark under license.
• Processing fee is $5 per instrument on withdrawals, cancellations and returns for excess of contributions; and $20 per instrument for rollovers to an eligible institution.