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).
Structured investment products offer a number of advantages for the investor, such as:
- Your choice of risk/returns balance
- Access to a wide range of assets and markets
- You can protect some or all of your capital (with capital protected products)
- Potentially higher returns than cash investments offer
- Fixed terms mean potentially higher returns
But structured investment products can also have disadvantages, such as:
- Fixed terms mean no access to your cash without penalty
- Some or all of your capital could be lost (with capital at risk products)
- Returns depend on the performance of the underlying assets (e.g. stock market)
- They have a minimum investment amount, which might not be suitable for you
See if any of the structured investment products in our comparison table meet the needs of your investment portfolio and apply online for more information.