Structured Deposits

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Structured deposits combine a fixed rate deposit with an investment product, giving customers the opportunity to potentially benefit from stock market gains alongside their initial deposit.

The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.

In simple terms, a structured deposit combines some of the features of a fixed term deposit account with those of an investment product.

Like fixed term deposits (otherwise known as fixed rate bonds), structured deposits have a set term. But whereas fixed term deposits pay a guaranteed interest rate for the duration of this period, many structured deposits do not. Instead, the rate of return is dependent on the performance of one or more financial assets or market indices.

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 may 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.

It’s important not to confuse structured deposit products with structured investment plans, which don’t usually offer any form of capital protection and may not be covered by the FSCS.

When you open a structured deposit product, you’re essentially agreeing to lock your money away for a fixed period. The exact term will vary depending on your chosen product and your personal savings goals. Once you’ve made your initial deposit, you won’t be able to top-up your product or access your money until the term ends. If you do have to withdraw your funds, you’ll have to pay a penalty and may receive back significantly less than you deposited.

Unlike fixed rate bonds, which pay a set interest rate for the whole term, the structured deposit rate is linked to the performance of a financial benchmark, product or asset. This might include an index like the FTSE 100 (or a combination of indices), company shares, bonds, currency or other fixed-income securities.

The exact formula used to calculate returns will depend on your chosen product and the underlying financial instrument to which it’s linked. If the asset performs well, you could receive a very competitive return. On the flip side, if things don’t go so well, there’s a possibility you might earn little or even no interest at all. Either way, you’ll still receive your original deposit back at the end of the agreed term.

There are several types of structured deposits available in the UK, including the following:

• Bond-linked – in this case, returns are linked to a single bond or basket of bonds
• Equity-linked – the rate of interest may be dependent on the performance of a single share, multiple shares, a specific equity index like the FTSE 100, or a basket of indices
• Interest rate-linked – returns may be linked to a floating interest rate
• Credit-linked – as the name suggests, returns are dependent on the credit quality of a specific entity or entities

As with any savings or investment product, it’s important to make sure you fully understand exactly what type of account you’re applying for and the terms and conditions. If you’re in any doubt, contact the provider or speak to an independent financial advisor for advice.

Structured deposit products may be an ideal option if you have a lump sum you can afford to lock away and won’t need access to. They may also be suitable if you want to take advantage of the stock market without fully exposing yourself to the risks of investing.

Generally speaking, a structured deposit product won’t be suitable if:

• You’re looking for a guaranteed fixed interest rate (if this is the case, a fixed rate bond may be a better option)
• There’s a chance you’ll need to access your money before the term ends
• You don’t have a lump sum to deposit
• You want a regular monthly income and dividends
• You want the option to top-up your account at your convenience

Although structured deposits share some of the same features as fixed deposits, they are very different products. Structured deposits can potentially deliver higher returns but, unlike fixed deposit products, the rate isn’t always guaranteed.

If the underlying financial asset underperforms, your return may be lower than anticipated or you may even receive no interest at all.

The Financial Services Compensation Scheme protects deposits of up to £85,000 per person, per UK-regulated banking group, if the product is offered by a UK-regulated bank or financial institution. This means your capital is safe up to that amount should the provider collapse. However, it’s important to understand that although your initial deposit is protected, there’s still a risk you won’t earn any interest.

Learn more about deposit protection.

Structured deposits might be a good investment if you want to potentially earn a higher rate of return than that available with other types of savings accounts. They could also be a good option for anyone who wants to take advantage of the stock market without putting their capital at risk.

With structured deposit products, you need to lock in your money until the end of the fixed term. You should therefore only open this type of product if you have a lump sum that you won’t need to access in the medium to long term. You’ll also need to be comfortable with the risk that you may not receive any interest if the stock market doesn’t perform in a particular way.

As always, you should do your own research when making financial decisions and take into consideration your own circumstances.

If you’re looking for the best structured deposit in 2025, you’ll need to start by comparing the different products that are available on the market.

Before you commit to opening any type of structured deposit product, it’s a good idea to assess your budget plan and financial circumstances so you know you can definitely afford to tie-up a lump sum. It’s also important to ensure you fully understand how the product works and the account terms and conditions.

What should I consider when comparing structured deposit products?

Some of the most important things to consider when comparing structured deposit products are:

• The length of the term – consider how long you could afford to lock your money away for
• How returns are calculated – which underlying financial asset(s) is interest linked to and are you comfortable with this?
• The initial deposit required – some accounts require a higher minimum opening deposit than others
• Penalties for early access – structured deposit products are designed for the medium to long-term, but it’s still important to check the penalties for early withdrawals
• Management fees – fees vary between providers so it’s important to do your research before applying for any type of structured deposit product

We don't offer structured deposit accounts at Raisin UK, but you can make your money grow with high interest savings accounts from a range of partner banks. Register for a free Raisin UK account today and open easy access, fixed rate bonds, and notice accounts with a single application.