This is the fourth issue of the Equity Linked Deposit Account. Has the product retained the same characteristics?

Yes, the Equity Linked Deposit Account, or ELDA, has proved to be a popular investment for the cautious Maltese investor particularly in such difficult times. The ELDA is a term deposit account that provides the same level of capital security one would expect from a normal bank account plus an opportunity for an investor to participate in the international equity market without a risk to the capital. This protection of the capital plus the added attraction of participating in the equity markets is proving to be a formula that investors like.

Apart from the capital security aspect, are there any other attractive features to the product?

Interest rates, both local and in the international markets, continue to be subdued. Savers do not like low interest rates. For this ELDA we are offering a guaranteed income of 10% over half the deposit effected by the investor. This is paid after 24 months and is equivalent to a return of 4.88% per annum.

The other half of the deposit will earn a return from any growth in the FTSE 100 Share Index over 48 months, without any risk to the capital. The account has been specifically designated in Maltese Lira so that the investor will not have the capital invested subject to any exchange risk.

Can you explain how the product works?

The ELDA is designed to reflect a deposit with two terms. The first term matures after 24 months. After the first 24-month term, half of the capital invested plus a guaranteed 10% gross interest will be paid. The remaining 50% balance will be tied till the end of the four-year term.

At the end of the four-year term the remaining balance will be paid back in full plus a rate of return which will reflect a 40% participation in any growth of the FTSE 100 Share Index during the four-year period.

Is this a limited offer?

This is a strictly limited issue to be launched on March 3 and close on April 12. The right to close the offer if there is a high demand for the product.

Would capital earn any interest until it is actually invested?

The official start date of the four-year term is April 16. A normal savings account interest rate will be paid to investors in this product for the period when the money is placed with the bank up to April 16.

What is the minimum and maximum deposit that can be invested?

The minimum amount is of Lm2,500 but there is no maximum deposit. There is no capital gains tax liability. Any bonus and interest are subject to withholding tax for Maltese residents. For more information clients may visit any HSBC branch in Malta and Gozo.