Understanding structured deposits

Structured deposits combine deposits with market-linked returns. Understand exactly how structured deposits work, what triggers returns, and where deposit insurance coverage ends.

Last updated 22 April 2026

A person's hands are holding a pen and writing on a document placed on a table.

Key takeaways

The return on a structured deposit is usually dependent on the performance of an underlying financial instrument
The full principal amount of the investment will be returned to you if you hold your investment to maturity, and the bank remains solvent

What are structured deposits?

A structured deposit combines a deposit with an investment product. The return on a structured deposit depends on the performance of an underlying financial asset, product or benchmark. These may include market indices, shares, interest rates, bonds or other fixed-income securities, foreign exchange rates, or a combination of these.

Structured deposits may be suitable for investors who want exposure to assets or markets that are not easily accessible to retail investors.

Types of structured deposits

Different structured deposits available

Equity-linked	May be linked to return of a single share, basket of shares, equity index (e.g., the S&P 500) or a basket of indices
Bond-linked	May be linked to return of a single bond (e.g., Singapore Government Securities), basket of bonds, bond index, or a basket of bond indices
Interest rate-linked	May be linked to a specified floating interest rate Returns may be directly linked to the specified interest rate, i.e., if the specified interest rate rises, your returns will rise and if the interest rate falls, your returns fall. But some returns are inversely related, i.e., when the specified interest rate falls, you get better returns and if the interest rate rises, your return falls Payments may also rise or "step up" on fixed dates if deposit is not redeemed by issuer
Credit-linked	May be linked to credit quality of a specified entity or entities If there is a "credit event" (e.g., if specified entity becomes insolvent or defaults on its loans), there may be no returns for investor

Note: Structured deposits may be offered in "tranches". Each tranche has either a fixed offer period or is available until the tranche is fully subscribed. The tranches may come with differing features and returns.

What are the returns?

Your return is calculated according to a formula set out in the structured deposit’s terms and conditions.

A structured deposit is different from a fixed deposit. Structured deposits may provide the potential for higher returns compared to fixed deposits, but you take on more risks, including the possibility that you receive returns that are lower than expected.

At maturity, you will receive the principal amount of the structured deposit. But just like traditional deposits, the return of the principal and any returns is subject to the credit risk of the bank holding the deposit. If the deposit is withdrawn early, you may not get back 100% of the money invested.

What are the risks?

Common risks associated with structured deposits

Withdrawal before maturity date	There may be substantial losses to your principal if you choose to end the investment early You should also bear in mind that structured deposits may be subject to periodic valuation, which may not be on a daily basis. This means that you may not be able to withdraw your deposit immediately Check the terms and conditions for early withdrawal of the deposit with your bank
Credit risk	If the bank defaults, you could lose all of your investment
Reinvestment risk	If the structured deposit is callable, you may risk having to reinvest your money at less attractive rates
No deposit insurance	Structured deposits are not insured under the Singapore Deposit Insurance Scheme and Policy Owners' Protection Scheme.

Fees and charges

Please check with your bank to find out about fees. If you make an early withdrawal, you may have to forgo some of your returns as there could be transaction or unwinding costs.

What's the most you can lose?

You may lose some or all of your return depending on how the return is structured and whether the underlying financial asset, product or benchmark underperforms.

The principal amount you invest is also subject to the credit risk of the bank your structured deposit is held with. Further, if you withdraw the deposit early, you may not receive 100% of the principal you invested.

Structured deposits VS fixed deposits

In the case of fixed deposits, the returns and maturity periods are fixed. Structured deposits, on the other hand, have variable returns, and in some cases, variable maturities as well.

Key differences between structured deposits and fixed deposits

	Structured deposits	Fixed deposits
Minimum deposit	A higher minimum investment amount may be required (usually $5,000).	Minimum amount for a fixed deposit can be less at $1,000.
Maturity period	Varies from 2 weeks to 10 years.	Varies from 1 month to 3 years.
Principal	Principal (or capital) will be repaid in full at maturity or if bank redeems (or "calls") deposit before maturity.	Principal (or capital) will be repaid in full at maturity.
Returns	Potentially higher returns compared with fixed deposits. But you are exposed to more risks. Returns depend on performance of underlying asset or index Returns you receive may further depend on: i) "cap" rate on underlying asset or index; and/or ii) participation rate	Returns are usually lower Funds are normally placed in money markets for a short period of time (for example, overnight)
Risks involved	Riskier than traditional deposits because returns depend on performance of other assets or indices. You may receive no returns although you would be repaid the principal invested at maturity Where a structured deposit is callable, you may be exposed to reinvestment risk, i.e. risk of having to reinvest your money at less attractive rates Investor is also exposed to credit risk of deposit-taking bank, i.e. risk that bank defaults on payments due to you	Considered low-risk as banks are obligated to repay the principal in full at maturity However, depositors are exposed to credit risk of deposit-taking bank, i.e. risk that bank defaults on payments due to you
Early withdrawal by depositor	You may lose part of return and/or principal if deposit is withdrawn before maturity. Amount repaid depends on market value of underlying asset or index linked to structured deposit Structured deposits may not be valued daily. If so, you may not be able to withdraw your deposit immediately	Early withdrawal may attract certain bank charges
Early redemption / callable by issuer (variable maturity)	Structured deposit may allow the bank to redeem (or "call") the deposit early. This means the maximum returns to you are capped	No early redemption by bank
Covered by the Deposit Insurance Scheme?	No	Yes
Guaranteed payments	Some structured deposits provide higher guaranteed early payments compared to traditional fixed deposits. Such payments are usually only for the first few months or years; payments in later years may be variable Ask about the effective rate of return for the structured deposit you are considering	Interest is guaranteed and fixed throughout term of fixed deposit (provided there is no early withdrawal)

Checklist

Not everyone should invest in structured deposits. Before you invest, check that you:

Want potentially higher returns but are also prepared for variable returns
Understand how returns are calculated and are clear about the factors and scenarios that can affect returns
Understand the risks associated with the structured deposit. Structured deposits use derivatives to hedge risks and to improve performance. Investors should be aware of the risks associated with the use of derivatives, including the risk that the provider or counterparty of the derivative defaults.
Are prepared to leave your money tied up for the periods required. If you need to convert your investments to cash in the short-term to meet specific needs every now and then, a structured deposit may not be suitable for you.
Are comfortable with the credit risk of the bank offering the structured deposit. If the bank defaults, you could lose all of your investment.

Documents you should receive

There is no specific document to be provided by your financial advisory representative. However, he is required to tell you information about:

The product’s features and risks, fees and charges, provisions for early termination
Any warnings, exclusions or disclaimers which may apply
The product provider

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