Capital protection is a mechanism that allows an investor to return the invested funds at the end of the investment term.

Financial instruments with capital protection are an important component of conservative and balanced strategies. These include deposits, some structured products and investment life insurance.

Deposit
Deposits are protected by the Deposit Insurance Agency (DIA), but in the amount of RUB 1,400,000. The total amount of deposits in different banks per person is taken into account. For example, if a client has a deposit of one million in one bank and one million in another and their licenses are revoked, the total insurance premium that the borrower will receive will not exceed 1,400,000 rubles and 600,000 will be lost.
Structured products

A structural product with capital protection includes simpler financial instruments: deposits, securities, currency, precious metals, raw materials and other assets. It consists of several parts, one of which fulfills just the protective function. The income part of structured products provides higher income compared to a deposit.

However, structured products do not fall under DIA protection. Capital protection is guaranteed by a competently chosen strategy, including products that are not widely available to private investors: options, forwards, bonds, futures.

Investment life insurance

Investment life insurance is one of the cases of insuring the risk of living up to the age set by the client himself. The invested funds are divided into two parts: conservative and investment. A separate strategy is used for the investment part, while the conservative part is invested in instruments with fixed returns and thus ensures the return of the invested funds by the end of the insurance program.

Since not all products provide capital protection, investors should carefully approach the process of selecting financial instruments, paying attention to the term, minimum investment volume, currency. If it is difficult to do this on your own, a financial advisor from BCS Premier – an expert in investments and finance – can help.