Structured Deposits

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I have been advised to invest some money (50k) into a "Structured Deposit" with Lloyds TSB offshore. It is a 2.5 year deposit that tracks the sterling exchange rate v the dollar.

Basically if the exchange rates staying with 10% of its vale at the strike date then after 2.5 years you make Capital + 20%. If the exchanges fluctuates but stays below the 20% change barrier you receive Capital +10%. If it goes past 20% barrier you get your deposit.

There is not risk to the deposit only inflation.

Sorry for the scant explanation but I am not allowed post a link yet.

Does anybody have any experience of the investments?

Any advice would be greatly appreciated.

Best Regards,
 
In my opinion, this is speculating, not investing. Nobody can predict what will happen to these two currencies over a 2.5 year period. Plenty of people can and will offer informed opinions about what may happen to them, but there are so many macro-economic factors that are utterly unpredictable that at best such opinions are guesses, albeit informed guesses.

So basically it's a bet, with the attraction that you will at least get your money back, assuming the provider remains solvent.
 
Fully agree with LDFerguson on this - it is speculation!

This is what is known as a derivative product and is not normally used for investing purposes. It breaks two of my basic rules for investing - it's complex and time is your enemy! Complex means that it is very difficult to predict the outcome with any reasonable certainty. And time is your enemy because it all has to happen within a certain period - very often it takes a bit longer for an investment idea to mature and you need to be in a position to take that time. The only thing that is sure about this product is that the company selling it will make money on it and you will at least get your capital sum back. And if that is all you get back then, you'll lost the return on a more stable product like a deposit account...
 
+1 on the other two replies, it is speculation.

A lot more of these products are being sold and made available in Ireland. The charges on these products are typically 5%. You will also have to do your own tax return on any gains made on this product (that may or may not be an issue).

If you want something that is a little boring in comparison consider the An Post 3 year Saving Cert, it will pay a 10% net return after 3 years (no DIRT applicable on this product).
 
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