Structured Products - Structured Deposits and Structured Investments

A structured produce ties up your money for a set time and might be designed to give you income, growth or both. Structured products are complex and can be more risky than they initially look, so professional financial advice should be sought.

A structured product is a kind of fixed term investment whose payout depends on the performance of something else, like a Stock Market Index, there are two types of structured product:

Structured Deposits – these are savings accounts, offered from time to time by some banks, building societies and N S & I, where the rate of interest you get depends on how the stock market index or other measure performs.

Structured Investments – these are commonly offered by Insurance Companies and Banks. Your money typically buys two underlying investments, one to protect your capital and one to provide the bonus. The return you get depends upon how the stock market or other measure performs. If it performs badly you can run the risk of losing your initial capital investment.

Structured investments and deposits are sold under many different names, including:

  • Guaranteed Equity Bonds
  • Structured Cash ISAs
  • Growth Deposit plans
  • Guaranteed Capital Plans
  • Guaranteed Stockmarket Bonds
  • Protected Investment Funds
  • Guaranteed Income Bonds

The word ‘guaranteed’ may differ from your interpretation, in that you are guaranteed to get the returns offered only if the index or investment performs as required in the products terms and conditions. Your capital is only guaranteed if the Company providing the guarantee can meet its obligations or is covered by the Financial Services Compensation Scheme.

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