UK-based structured product provider Idad has teamed up with Goldman Sachs to create a structured deposit plan.
The offering will provide investors with a seven-year plan, which is protected by the Financial Services Compensation Scheme (FSCS), the firm said.
They will receive 3.5% per annum if Goldman Sachs calls the deposit early on any annual observation date, or 0.5 times any growth in the FTSE 100, Idad told International Adviser.
At maturity, investor capital is protected in full, it added.
This is part of the firm’s ‘Callable’ FTSE deposit range that it has been rolling out during 2019 and 2020.
A spokesperson told IA: “At Idad we firmly believe that, in the UK retail market, structured deposits have a place in many portfolios given their conservative, low-risk characteristics.
“Coupled with ultra-low interest rates and yield on government and investment grade debt, investors really are on the ‘hunt for yield’.”
Gap in the market
The provider said that its structured deposit plan is particularly suited within a Sipp or an Isa to get the “best tax relief”, as well as within pensions due to capital protection.
The spokesperson added: “Longer-term interest rates have been on the rise over the last few months and this has made structured deposits more viable.
“Also, Investec recently pulled out of offering structured plans to UK retail advisers after 12 years.
“This leaves a pretty large gap which Idad is looking to fill, helping advisers continue to offer structured deposits to their clients as and when appropriate.
“Idad is hoping to continue to launch the Callable Goldman Sachs deposit plan throughout 2021 with more offers to come too.”