The cashcade deposit invests clients’ money in a pooled deposit held with AAA-rated Rabobank and allows them to link interest gained to rises in the FTSE 100.
Investors can also choose to take traditional deposit interest linked to Libor at no cost, enabling them to move into cash if they believe that the stockmarket will decline or stagnate.
They can shift to traditional interest immediately but can only move back to the FTSE 100 on four dealing days a year. Exposure to the index is allocated at the start of each quarter and one year after each allocation, with any rise in the index locked in and paid as interest.
The plan’s booster option offers the choice to reinvest interest in the FTSE 100 at a 200 per cent limit of the capital balance.
Minimum deposit for the plan is £20,000 and withdrawals can be requested at any time subject to three months’ notice.
There are no trading costs and trail commission is 0.25 per cent a year. The plan is aimed at private and institutional investors and provides 100 per cent capital security subject to counterparty risk.
Cashcade director David Lloyd believes the plan is an alternative to cash. He says: “With this plan, your capital is not linked to the stockmarket at all, only the value of your interest.”
Baronworth Investment Services director Colin Jackson says: “It is not the easiest product to understand. It looks quite interesting and if you are optimistic that the markets will go up and like a punt, you could get a good return.”