What does structured deposit mean?

A structured deposit in finance refers to a type of investment product offered by banks and financial institutions. It is a combination of a traditional deposit account and an investment product, offering a potential for higher returns compared to a regular savings account. Structured deposits typically have a predetermined maturity date and offer a return based on the performance of an underlying asset, such as a stock market index, a basket of stocks, a commodity, or a currency. The return on the deposit may be linked to the performance of the underlying asset, and the potential gains are often capped or limited by a predetermined formula or structure. These deposits are often marketed as a way for investors to potentially benefit from market movements, while still providing some level of capital protection. However, it is important to note that structured deposits carry some level of risk, as the return is tied to the performance of the underlying asset. If the underlying asset performs poorly, the investor may receive little to no return on their deposit. Structured deposits are suitable for investors who are comfortable with a certain level of risk and are seeking higher potential returns compared to traditional savings accounts. However, investors should carefully consider the terms and conditions, as well as the associated risks, before investing in a structured deposit. It is important to understand the underlying asset, the potential returns, and the level of protection offered by the deposit. Additionally, investors should consider consulting with a financial advisor to determine if a structured deposit is suitable for their investment goals and risk tolerance.