|
The Premium Deposit is basically a Time Deposit,
but with a difference. Unlike an ordinary time deposit
which pays you in the same currency as your original
investment, the Premium Deposit will pay you your
principal and interest in one of two currencies (the
base and the alternative) at a pre-agreed
exchange rate upon maturity.
Benefits and risks
The benefit of investing in a Premium Deposit
lies in the much higher interest rate compared to
the ordinary time deposit. Besides getting higher
returns, the high interest rate will also provide
some buffer against any exchange loss.
The risk is that your funds will be exposed
to foreign exchange volatility, as at maturity, you
will be paid in the weaker of the two currencies with
reference to the pre-determined exchange rate. Thus,
you should choose an alternative currency with the
potential to strengthen in the future, as you
may be able to sell it at a later date and make an
exchange gain.
Back to top
When is the right time
to invest?
Timing, choice of currencies and personal investment
preferences are critical factors in deciding if you
want to invest in a Premium Deposit and when to do
so. Here are some reasons you may encounter :
- When you have to hold on to a weakening currency.
By investing in this currency, not only will it
earn you higher interest, but you will also have
a greater chance of receiving back your money in
the same currency.
- When you want to take advantage of higher
interest rates and are indifferent to the alternative
currency. In other words, you are just as happy
receiving your money in either currency.
- When the exchange value between the pair of
currencies are relatively stable. In this scenario,
the limited exchange rate movement between the two
currencies will help improve your interest differential
gains.
- When you have a view on a particular currency
but are reluctant to do a direct conversion.
The Premium Deposit is aimed at the experienced investor
who is not afraid to take on a greater degree of risk
versus a safer ordinary time deposit.
Back to top
How to start a Citibank Premium
Deposit
To start, you'll need a minimum of US$50,000 or equivalent.
You can choose from a wide range of major currencies
and tenures from 2 weeks to 6 months.
Back to top
To apply, please complete the following Agreements,
sign and return to us.
Important:
Foreign currency investments are subject to rate fluctuations,
which may provide both opportunities and risks. You
may experience a loss when you convert foreign currency
back to your home currency. Exchange controls may
be applicable from time to time to certain foreign
currencies. You should therefore determine whether
any foreign currency investment is suitable for you
in the light of your investment objectives, your financial
means and your risk profile. In addition, partial
withdrawal is not allowed. Premature withdrawal of
full deposit amount is also strongly discouraged.
Any pre-termination costs incurred will be deducted
from the deposit.
|
Premium Deposit
