Compare Structured Deposit ISAs

Why consider a structured deposit ISA?

Given the current low interest rates, returns on fixed rate cash ISAs aren't as high as they used to be. However, if you're happy to lock away money for a fixed period, there are some alternative options you may want to consider.

If you're looking for alternatives to fixed rate ISAs that still protect your capital, structured deposit ISAs could be worth considering. Structured deposit ISAs are a type of fixed term deposit plan in which returns are linked to the performance of an underlying asset, such as the FTSE 100 Index.

If you've got a cautious approach to risk, but want the potential for higher returns than those currently offered by traditional fixed term ISAs, structured deposit ISAs may be of interest to you. While returns are not guaranteed, these ISAs do have the benefit of offering the potential for competitive rates of return.

What's the difference between a structured deposit ISA and a regular cash ISA?

A structured cash ISA offers the potential for higher returns than regular cash ISA, but is capital-protected. You can only save up to your maximum ISA allowance into an ISA of any type, including a structured deposit ISA.

Your returns are based on market performance. This means that if your investment performs well, you'll receive your capital back at the end of the term plus any income you made on the initial deposit. In the event that your investment doesn't perform well, your initial capital will be repaid in full, but you will not receive any additional return.

As structured deposit ISAs are cash based, they're eligible for the Financial Services Compensation Scheme (FSCS) - just like a regular cash savings account.

Things to bear in mind when considering a structured deposit ISA

1. A structured cash ISA provides exposure to the stock market without risking your initial capital.
2. Remember that if the deposit taker goes bust, you could lose your capital. Your savings are only protected up to the current FSCS limit per individual, per institution, so it could make sense to spread savings in excess of this amount across several institutions.
3. The term of a structured deposit ISA is usually around three to six years, so you need to be prepared to tie up your cash for that period of time.

To see what structured products might be available you can check the comparison table at the top of this page to view a selection of options.