The CashCade deposit places investors’ capital in a pooled deposit held with AAA rated Rabobank and allows them to link any interest gained to rises in the FTSE 100 or take traditional deposit interest linked to LIBOR.
Investors can switch between both forms of interest at no cost, enabling them to shift to cash if they believe the stock market will decline or stagnate.
They can shift to cash and traditional interest immediately but can only move back into the FTSE quarterly on four dealing days per annum.
Exposure to the FTSE 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” enables investors to boost gains in the event of a rising market by reinvesting interest in the FTSE. This has been capped at 200 per cent of the capital balance to control the plan’s volatility.
Minimum deposit is £20,000 and withdrawals require 3 months notice with interest paid during the deposit with no clawback due to notice.
The plan is targeted at private and institutional investors seeking the benefits provided by traditional 90 day notice savings accounts but who want to better the low interest rates available in the current market.
The plan provides 100 per cent capital security subject to counterparty risk.
No trading costs apply and trail commission is 0.25 per cent per annum of the capital balance.
Cashcade director David Lloyd says: “This is an alternative to cash. Some might people see it as a low risk way of coming out of the stock market for a while but in terms of the expectations it’s going to produce it’s cash plus rather than investment minus.”