Spotlight On: HSBC's stock market-linked savings account

The deal

The savings account offers an 18 per cent return on investments over three-and-a-half years, but only as long as the stock market does not fall.

The good points

You cash is protected and the rate offered works out as an annualised equivalent of 4.84 per cent, which looks attractive in the current low-rate environment.

The bad points

Shares are volatile. If you had invested in the FTSE 100 three-and-a-half years, for instance, you would have lost money. But in the three-and-a-half years from January 2004 to July 2007 you would have made a 40 per cent profit. An account like this could mean getting much less than the growth of the FTSE – or nothing if there's no growth.

Conclusion

If you want to invest in the stock market, you will achieve better growth returns if the market rises through a fund that invests directly in shares. If you are worried about losing your money and are attracted by the guarantee, then choose a traditional savings account or tax-free Individual Savings Account (Isa) instead of this hybrid.