What is a structured deposit account offered by Barclays?

I’ve seen a 12 month fixed savings account that I’m interested in opening, but I’m confused by whether it is a straightforward product or not.

It’s a Barclays deal described as a ‘structured deposit account’ and is available on savings platform Raisin paying 5.25 per cent.

However, I cannot find this account on Barclays own website.

What exactly is a structured deposit account and is it a safe place to lock away my cash for a year? Via email.

Raisin is offering a one-year structured deposit from Barclays, which offers a fixed, guaranteed interest rate for one-year plus bonus dependent on the performance of the FTSE 100 index

Ed Magnus replies: Structured deposits combine fixed-rate savings and investing. Put another way, it’s a way of mixing stock market gains and savings.

Like most fixed-rate savings deals, structured deposits have a set term. But whereas fixed savings pay a guaranteed interest rate, many structured deposits don’t.

Instead, the rate of return is dependent on the performance of one or more financial assets or market indices.

This could include returns that are linked to a single bond or basket of bonds or a rate dependent on the performance of a single share, multiple shares, a specific equity index like the FTSE 100, for example.

For example, if a structured deposit rate is linked to the performance of the FTSE 100, you may receive an interest payment on the maturity date if the index is higher than when you opened the account. 

However, you won’t receive any interest if the index has fallen or remains the same.

Structured deposit rates can be higher than those available with traditional savings accounts and fixed-rate bonds, but with some products, there’s also a risk you won’t see any return at all.

Unlike some investment products, however, you will receive your original deposit amount back at the end of the term.

Plus it also means you get the peace of mind that that your capital is protected under the Financial Services Compensation Scheme (FSCS). 

This protects deposits of up to £85,000 per person, per UK-regulated banking group, or up to £170,000 in the case of joint accounts.

What about this Raisin deal?  

Raisin acts as a marketplace enabling savers to manage multiple accounts in one app and online account.

Its one-year structured deposit from Barclays, offers a fixed interest rate for one-year and an additional potential bonus dependant on the performance of the FTSE 100 index.

This means it offers a fixed rate of 5.25 per cent alongside the additional potential bonus of 0.1 per cent.

Exclusive: The Barlcays deal can be found via the savings platform, Raisin UK.

The additional bonus will not be payable if the FTSE 100 Index is below the level it was on the date of your initial deposit on the 11 month anniversary of your deposit being placed. 

Should this day not be a working day then the index level will be taken on the next working day.

So if the FTSE 100 index is up then you’ll recieve a 5.35 per cent rate. If it’s below the level it was at the time you made your initial deposit, you will still receive the fixed return of 5.25 per cent.

This post first appeared on Dailymail.co.uk