Structured deposit kick out plans offer investors a pre-determined rate of return based on an underlying asset e.g. FTSE 100 performing in line with set targets on one of a set of given dates. As they are deposit based plans capital is protected. In the event that the deposit taker is unable to repay your initial investment and any returns stated you may be entitled to compensation from the Financial Services Compensation Scheme (FSCS) up to £85,000 depending on your individual circumstances.
So as an example a deposit kick out plan where the underlying asset is the FTSE 100, where after year one of the plan on the set date the index has finished above the target level determined at the beginning of the plan, there would be a pre-determined payout e.g. 7% plus the repayment of the original capital. If the index is lower at the set date the investor would need to wait until the second anniversary before receiving a potential payout. If the kick out does not happen on any of the anniversary set dates the plan will run to full term. For a selection of deposit kick out plans see below: