What are guaranteed products?
When we talk about a guarantee or guarantees, we mean the promise we make that the product or feature will deliver you a certain benefit. There are various types of guaranteed products offered in the markets and it is important that you understand the product. If something is too good to be true it often is.
It does cost a bit extra for guarantees. It's much like paying for the things you insure on a day-to-day basis just now. The cost of the guarantees will depend on where you choose to invest your money. Guarantees can help guard against some of the risks such as losing money due to investment performance. Any guarantees are based on the ability of the issuing insurance. If, for example, that company no longer existed, then the guarantees it provides may be affected.
Guarantees might not be suitable for everyone, however they could be appropriate if you:
- have cash on deposit and are looking for a higher rate of return without risk to your investment
- want to make the most of potential stock market growth