Abstract. We introduce the concept of guarded saturated sets, saturated sets of strongly normalizing terms closed under folding of corecursive functions. Using this tool, we can model equi-inductive and equicoinductive types with terminating recursion and corecursion principles. Two type systems are presented: Mendler (co)iteration and sized types. As an application we show that we can directly represent the mixed inductive/coinductive type of stream processors with associated recursive operations.