Range accrual

In finance, a range accrual is a type of derivative product very popular among structured-note investors. It is estimated that more than US$160 billion of Range Accrual indexed on interest rates only have been sold to investors between 2004 and 2007. It is one of the most popular non-vanilla financial derivatives. In essence the investor in a range accrual is betting that the reference "index" - usually interest rates or currency exchange rates - will stay within a predefined range.