The safety of your original capital depends on the ability of the counterparty (the institution providing the underlying assets, rather than the product provider) to repay your investment at the end of the term. You can assess the strength of a counterparty, and therefore the relative risk to your investment, by comparing their credit rating score, from AAA to D, using a credit rating agency such as Standard & Poor's (www.standardandpoors.com) or Fitch (www.fitchratings.com).
Some of the benefits of structured investments include:
- Higher potential returns than investing in cash
- Access to a wide range of assets
- Potentially higher returns for locking your cash in for fixed terms
- A choice of performance/risk to suit your needs
- Protection for some or all of your capital (capital protected products)
But some aspects of structured products might mean they are unsuitable for you, such as:
- Some or all of your capital could be at risk (capital at risk products)
- Fixed terms mean no access to the cash in that period without penalty
- Minimum investments, which might put them outside your investment range
- They do not offer guaranteed returns and can pay back less than you put in
See if structured investments could help you make the most of your money by comparing some of the latest products using our simple comparison table.