A type of structured financial instrument (capital protected instrument) that provides investors with capital protection, while its payoff depends on one underlying or more—usually stocks, baskets of stocks or commodities. A guarantee certificate combines a zero-coupon bond and a call option contract on a specific underlying asset.

A guarantee certificate ensures capital protection- i.e., 100% of its principal is guaranteed in full on the expiration date of the certificate. However, during lifespan of the certificate, investors can purchase it for its offered price at the time and sell it at its bid price in the market. It also provides a guaranteed coupon bonus. If the investor holds a guarantee certificate until the expiration date, he/ she would receive 100% of the nominal value + coupon % p.a.

A guarantee certificate suits risk-averse investors who seek to hold a certificate over the long-term (until the maturity date) and anticipate growth in the underlying asset, starting in the mid term.