Structured Investments: What are the differences between structured investments and fixed deposits?

The table below illustrates the main differences between structured investments and fixed deposits:

	Fixed Deposits	Structured Investments
Minimum amount required	RM500	[1] Floating rate negotiable instruments of deposits: RM100,000 Investments linked to derivatives: RM250,000
Return: Fixed interest rate		(Only applicable for investments with a minimum interest feature)
Potential enhanced return/interest (performance pay-off)
Full principal sum payable on i. maturity		(Applicable for principal protected investments only)
ii. early withdrawal by depositor		Investors may lose part of their return and/or principal. The amount to be paid to investors depends on the market value of the underlying assets.
iii. early redemption by banking institution	Not applicable
Risks involved	Relatively risk free	Return can be affected by various types of risks such as interest rate risk, market risk, foreign currency risk and early termination risk.
Protection by Malaysia Deposit Insurance Corporation [2]

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References

1. ^ Floating rate negotiable instruments of deposits and investments linked to derivatives are structured investments with difference requirements, and different features such as contract tenure and tradability.



2. ^ Subject to maximum coverage limit as determined by the Malaysia Deposit Insurance Corporation. The official website of the Malaysia Deposit Insurance Corporation (Perbadanan Insurans Deposit Malaysia - PIDM)

Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)

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