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Disclosure statement for
Certificates of Deposit held at UBS
UBS Financial Services Inc.
UBS and your Financial Advisor appreciate the opportunity to The CDs of any one Issuer that you may purchase will be eligible
service your wealth management needs. As part of this for FDIC insurance up to $250,000 (including principal and
commitment, we make it a priority to provide you with accrued interest) for each insurable capacity (e.g., individual,
important information regarding the types of investments you joint, IRA, etc.). For purposes of the $250,000 federal deposit
hold. This disclosure outlines the specific terms and conditions insurance limit, you must aggregate all deposits that you
for brokered Certificates of Deposit and includes among other maintain with the Issuer in the same insurable capacity,
information: including deposits you hold directly with an Issuer and deposits
you hold through UBS and other intermediaries.
Terms of CDs
Important Investment considerations The extent of, and limitations on, federal deposit
Deposit insurance insurance are discussed below in the sections headed
"Deposit insurance" and "Deposit insurance for CDs
purchased by retirement plans and accounts." A CD may
Questions about FDIC deposit insurance coverage not be held at another broker/dealer and jumbo CDs may
Payments under adverse circumstances not be resold in denominations of less than $100,000.
Additions or withdrawals
Fees Terms of CDs
Federal income tax consequences The maturities, rates of interest and interest payment terms of
CDs available through UBS will vary. Both interest-bearing and
Please take the time to consider this disclosure carefully. If you zero-coupon CDs may be available. You should review carefully
have questions, please reach out to your Financial Advisor. the trade confirmation and any supplement to this Disclosure
Statement for a description of the terms of the CDs. You should
Additional important information also review the investment considerations discussed below in
The information contained in this Disclosure statement for the section headed "Important investment considerations."
Certificates of Deposit held at UBS ("Disclosure Statement") The CDs will mature on the date indicated on the trade
may not be modified by any oral representation made confirmation. The CDs will not be automatically renewed or
prior or subsequent to the purchase of your certificate of rolled over, and interest on the CDs will not continue to accrue
deposit ("CD"). or (in the case of zero-coupon CDs) accrete after maturity. At
Certificate of Deposit disclosure statement maturity the CD balances will be remitted by the Issuer to UBS
The CDs described below are made available through and credited to your account with UBS. If the maturity date is
UBS Financial Services Inc. ("UBS") to its customers. Each CD not a business day, the CD balances will be paid on the next
is a deposit obligation of a depository institution domiciled in succeeding business day. A "business day" shall be a day on
the United States or one of its territories (an "Issuer"), the which UBS and banks in both the Issuer's domicile and New
deposits and accounts of which are insured by the Federal York are open for business.
Deposit Insurance Corporation (the "FDIC") within the limits Interest-bearing CDs. Interest-bearing CDs pay interest at either
described below. Each CD constitutes a direct obligation of the a fixed rate or at a variable rate. A fixed rate CD will pay the
Issuer and is not, either directly or indirectly, an obligation of same interest rate throughout the life of the CD. The interest
UBS. CDs may be purchased both upon issuance (the "primary rate on variable rate CDs may increase or decrease from the
market") and in the secondary market. The CDs described initial rate at predetermined time periods ("step rates") or may
below are issued in (i) $100,000 denominations ("jumbo CDs"), be reset at specified times based upon the change in a specific
or (ii) $1,000 denominations ("small denomination CDs"). index or indices ("floating rates"). The dates on which the rates
Unless otherwise indicated, references to "CD" and "CDs" in on step rate CDs will change or the rates on floating rate CDs
this Disclosure Statement apply to both jumbo CDs and small will reset, as well as a description of the basis on which the rate
denomination CDs. will be reset, will be set forth on the trade confirmation or a
UBS will advise you of the names of Issuers currently making supplement to this Disclosure Statement.
CDs available and, if your CD is purchased in the primary Some interest-bearing CDs may be subject to redemption on a
market, the date on which your CD will be established with the specified date or dates at the discretion of the Issuer (a "call").
Issuer (the "Settlement Date"). Upon request, you will be If the CD is called, you will be paid all principal and interest
provided with financial information concerning the Issuer of a accrued up to, but not including, the call date. The dates on
CD that you would receive upon request if you established a which the CD may be called will be specified on the trade
deposit account directly with the Issuer. UBS does not guarantee confirmation or a supplement to this Disclosure Statement.
in any way the financial condition of any Issuer or the accuracy Interest-bearing CDs are offered in a wide range of maturities
of any financial information provided by the Issuer. and are made available in (i) minimum denominations and
An Issuer may use proceeds from the sale of the CDs for any increments of $1,000 for small denomination CDs or (ii)
purpose permitted by law and its charter, including making minimum denominations and increments of $100,000 for
loans to eligible borrowers and investing in permissible financial jumbo CDs.
products. UBS or one of its affiliates may from time to time act Unless otherwise specified in the trade confirmation or any
as a broker or dealer in the sale of permissible financial products supplement to this Disclosure Statement, interest earned on
to an Issuer. interest-bearing CDs with original maturities of one year or less
will be paid at the maturity of such CDs. Interest earned on
interest-bearing CDs with original maturities of more than one
year will be paid monthly, quarterly, semiannually or annually Because UBS is holding the master certificate, you may not
and at maturity as specified on your trade confirmation or any transfer your CD through another broker/dealer. Evidence of
supplement to this Disclosure Statement. The interest rate on your ownership of the CD on the Issuer's books will be subject
variable rate CDs will be reset periodically and interest will be to applicable law and the Issuer's terms and conditions,
paid monthly, quarterly, semiannually or annually and at including those related to the manner of evidencing CD
maturity as specified on your trade confirmation or any ownership. If you choose to remove UBS as your agent, we will
supplement to this Disclosure Statement. have no further responsibility for payments made with respect
to your CD. If you establish your CD directly on the books of
Interest payments on interest-bearing CDs are automatically the Issuer you will have the ability to enforce your rights in the
credited to your account with UBS. Interest will accrue up to, CD directly against the Issuer.
but not including, the interest payment date, the maturity date
or any call date. If an interest payment date falls on a day that Important Investment considerations
is not a business day, interest will be paid on the first business CDs are most suitable for purchasing and holding to maturity
day following the interest payment date. For specific rate and you should be prepared to hold them to maturity. UBS,
information for any interest period, please contact UBS. though not obligated to do so, may maintain a secondary
market in the CDs after their Settlement Date. If you are able to
Interest on CDs is not compounded. Interest on CDs in the sell your CD, the price you receive will reflect prevailing market
primary market is calculated on the basis of the actual number conditions and your sales proceeds may be less than the amount
of days elapsed over a 365-day year. However, the amount of you paid for your CD. If you wish to dispose of your CD prior to
interest on CDs that are purchased in the secondary market may maturity, you should read with special care the sections headed
be based on other interest rate calculations. Please contact UBS "Additions or withdrawals" and "Secondary market."
with questions concerning the interest rate calculation on a
secondary market CD. You should be aware that jumbo CDs may be less liquid than
small denomination CDs and CDs held at UBS may be less liquid
Zero-coupon CDs. Zero-coupon CDs do not bear interest but than CDs that may be transferred to other broker/dealers.
rather are issued at a substantial discount from the face or par Your jumbo CD may not be resold in denominations less
amount, the minimum amount of which is (i) $1,000 for small than $100,000.
denomination CDs or (ii) $100,000 for jumbo CDs. Interest on
the CD will "accrete" at an established rate and the holder will You should compare the rates of return and other features
be paid the par amount at maturity. of the CDs to other available investments before deciding to
purchase a CD. The rates paid with respect to the CDs may be
Evidence of the CDs higher or lower than the rates on deposits or other instruments
You will not receive a passbook, certificate or other evidence available directly from the Issuer or through UBS. Variable rate
of ownership of the CD from the Issuer. The CDs are evidenced CDs present different investment considerations than fixed rate
by one or more master certificates issued by the Issuer, each CDs and may not be appropriate for every investor. Depending
representing a number of individual CDs. These master upon the type of variable rate CD (step rate or floating rate) and
certificates are held by UBS which, as custodian, keeps records the interest rate environment, the CD may pay substantially
of the ownership of each CD and will provide you with a written more or substantially less interest over the term of the CD
confirmation of your purchase. You will also be provided with a than would be paid on a fixed rate CD of the same maturity.
periodic account statement from UBS that will reflect your Furthermore, if the CD is subject to call by the Issuer, you may
CD ownership. You should retain the trade confirmation and not receive the benefits of any anticipated increase in rates paid
the account statement(s) for your records. The purchase of a on a variable rate CD. You should carefully review any
CD through UBS is not recommended for persons who wish to supplement to this Disclosure Statement that describes the
take actual possession of a certificate. Your account statement step rate or the basis for resetting a floating rate and, if the
from UBS may provide an estimate of the price you might CD is subject to call by the Issuer, the time periods at which
receive on some or all of your CDs if you were able to sell them the Issuer may call the CD.
prior to maturity. Any prices on your statement are estimates
and are not based on actual market prices. You should ask UBS In the event the Issuer approaches insolvency or becomes
to explain its statement pricing policies. Your deposit insurance insolvent, the Issuer may be placed in regulatory conservatorship
coverage and, if your CD is callable, the amount you would or receivership with the FDIC typically appointed the conservator
receive if your CD is called will be determined based on the or receiver. The FDIC may thereafter pay off the CDs prior to
outstanding principal amount of your CD, or the accreted maturity or transfer the CDs to another depository institution.
value in the case of a zero-coupon CD, not the estimated If the CDs are transferred to another institution, the new
price. See the sections headed "Deposit insurance" and institution may offer you a choice of retaining the CD at a
"Secondary market." lower interest rate or having the CD paid off. See the sections
headed "Deposit insurance" and "Payments under adverse
Each CD constitutes a direct obligation of the Issuer and is not, circumstances."
either directly or indirectly, an obligation of UBS. Your CD will
be established on the Settlement Date. No deposit relationship If your CD is paid off prior to maturity as a result of the Issuer's
shall be deemed to exist prior to the receipt and acceptance of insolvency, exercise by the Issuer of any right to call the CD or a
your funds by the Issuer. voluntary early withdrawal (see the section headed "Additions
or withdrawals"), you may be unable to reinvest your funds at
If you choose to remove UBS Financial Services Inc. as your the same rate as the original CD. UBS is not responsible to you
agent with respect to your CD, you may have the ownership for any losses you may incur as a result of a lower interest rate
of your CD evidenced directly on the books of the Issuer. on an investment replacing your CD.
What is the interest rate on a jumbo CD? Thus, the typical certificate of deposit interest rate for a 5-year jumbo CD range from 0.32 to .79%. What is a Jumbo CD? A jumbo CD is a type of high-yield certificate of deposit that requires more capital than a traditional CD. Both CDs and savings accounts offer fixed or variable interest in exchange for depositors keeping their funds in the account until maturity.
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