High level of capital market performance and guaranteed principal
The Bank of Jerusalem allows investment in a variety of structured deposits that incorporate a guaranteed principal with potential for relatively high yields linked to financial indices in the capital market. The structured deposits are based on underlying assets (an index, a commodity, a group of stocks, etc.) and allow the investor to benefit from market fluctuations without exposing the principal to a higher degree of risk. The deposits are selected according to various trends in the capital market, which are expected to generate an excess return on deposits and other forms of investment with relatively low risk.
Who is it for?
- Those interested in a guaranteed principal, but also looking for a potentially high yield relative to market conditions.
- Those interested in capital market investing, but concerned about market fluctuation and potential loss of capital.
- Those interested in diversifying their investments portfolio with relatively low risk and potential for high yield.
Those interested in medium-long term investments.
What's the risk?
- No liquidity – you cannot withdraw the deposit prior to its maturity date. The sum invested in the structured deposit has to be money that you will not require during the investment period.
- Alternative interest – while the structured deposit's principal is fully guaranteed, there is no assurance regarding the yield the deposit may generate. There may be situations at the end of the deposit that another asset that is considered low risk for the same period, will generate an alternative higher yield.
- The underlying asset – the potential yield in each structured deposit depends on the underlying asset (index, commodity, group of stocks) on which it is based. To receive any yield, the underlying asset must rise, or other terms of the deposit agreement must be fulfilled.
Why is it worth it?
- Structured deposits are high-quality alternative to relatively low risk investments. Although the yield is not guaranteed, the bank makes good-faith efforts to select underlying assets that have a high positive potential return for the period of investment.
- Due to current market conditions, the alternative yield, which is waived in structured deposits, is relatively low.
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