Following the financial meltdown in USA, many investors in Singapore were affected also. Many of these investors has bought structured products from the major local banks like DBS, UOB, OCBC and POSB.
Bank Staffs and Relationship managers have told investors that the structured products are principal guaranteed. They will be able to take back their principal amount should anything happen. But this is not the case as most structured products are Principal Protected.
There is a difference between the term 'Principal Guaranteed' and 'Principal Protected'. Most of the structured products are Principal Protected. It means it will at least return the principal amount back after the investment period ends. But if the product were to run into problems (bank bankrupt or investment problems), investors may not get back the principal amount. In the worst scenario, investors will not even get a single cents back.
Fixed Deposit is a Principal Guaranteed products. If the product were to met with problems, the bank still must return the principal amount. Investors will only lost part or all the money if the bank went bankrupt.