Dual Currency Investment
(DCI)
HOW DO DUAL CURRENCY INVESTMENTS WORK?
Dual Currency Investment (DCI) is a foreign exchange
STEP 1: Customers place their investment in the currency of their
choice (base currency i.e. EUR).
product linked with a fixed deposit. This investment product
can meet your foreign currency needs while offering the
potential for greater interest than what is usually available
with traditional fixed term deposit.
The DCI is preferred by customers who potentially want
to achieve a greater return than from short term cash
investment. The customer deposits money in one currency
STEP 2: Customers select the following parameters of their
Investment:
1. Select the alternate currency (i.e. USD)
2. Set the Terms of Investment (1 week to 3 months)
3. Select the “Strike Rate” or conversion rate which depends
on the customer’s investment strategy and agreed rate which
the customer feels comfortable to be switched to an alternate
Currency. Alternatively, in case customer has a targeted
interest rate, it will be used to determine the “Strike Rate”.
(base currency) for a set period with the concluding
outcome being the original deposit and yield being repaid
in the base currency or the alternative currency depending
on where spot is settled at expiry.
FEATURES
The minimum transaction amount is EUR200,000
(alternate currencies: USD, GBP, CHF, AUD, JPY, CAD, ZAR)
Deposit Term: 1 week to 3 months
Opportunity to earn potentially higher returns on investment in
the currency markets
STEP 3: At Maturity date, customer will either receive the invested
amount and interest in either the base currency (EUR) or the
alternate currency (USD) and the enhanced interest rate in USD.
This is determined by comparing the “Strike Rate” with the spot
rate two business days before maturity. The Strike rate will only
apply in the event that the base currency is converted into the
alternate currency.
HOW DO DUAL CURRENCY INVESTMENTS WORK?
Mr John Smith looks at various currency options and decides to
deposit EUR200,000 for 1 month for an increased yield of 7.94%
with a conversion rate of 1.1250.
EUR/USD with Spot Rate at 1.1090 for a 1 month product the
following alternatives are available:
WHY INVEST IN DUAL CURRENCY INVESTMENT?
Potential to earn higher returns
Choice of tenors (select an investment period between
1 week and 3 months)
Choose from a wide range of currencies (USD, EUR, JPY, GBP,
CHF, CAD and AUD)
Opportunity to obtain the alternate currency at a lower exchange
rate (as compared to the exchange rate on the day you invested)
Suitable for investors with the need for one or a variety of
alternate currencies
Alternative 1
Alternative 2
Alternative 3
Alternative 4
Yield
7.94%
5.99%
4.50%
3.26%
Strike
1.1250
1.1300
1.1350
1.1400
Potential Exchange Rate scenarios
Scenario 1 - Deposit plus interest
converted at strike rate to
alternative currency
Strike
Rate
WHAT ARE THE RISKS IN INVESTING IN DUAL
CURRENCY INVESTMENTS?
The investment is exposed to foreign exchange risk. Principal
and interest may be redeemed at maturity by the bank at its sole
discretion in the alternative currency, and if the investor chooses
to convert such amount back to the investment currency, they
may incur a potential capital loss
A DCI cannot be withdrawn before maturity
Scenario 2 - Client receives 100%
of original deposit plus a 7.94%
per annum yield
Start date
2 days before deposit maturity date
Scenario 1 - At expiration (2 business days before deposit maturity), if the spot
rate is above or equal to the conversion level of 1.1250, the client is repaid 100%
of their original deposit plus a 7.94% per annum yield converted at 1.1250 into
USD. The client can decide to either keep the USD amount on deposit or enter
into a new structured deposit product to enhance their yield on a USD deposit or
get converted back into their original base currency which is EUR.
Scenario 2 - At expiration (2 business days before deposit maturity), if the spot
rate is below the conversion level of 1.1250, the client is repaid 100% of their
original deposit plus a 7.94% per annum yield.
GET IN TOUCH
Contact your Relationship Manager for more information. Terms
and Conditions apply.