Health Warning
This is a structured product involving derivatives. The investment decision is yours but you should not invest in Currency Linked Deposit unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
What is Currency Linked Deposit?
Currency Linked Deposit ("CLD") is a time deposit linked with a currency option. In addition to the ordinary time deposit interest rate, it gives investor an extra interest rate derived from the option premium obtained from the selling of a currency option.
Characteristics of CLD
Deposit Tenor: Flexible, normally range from 1 week to 1 month. CLD with bigger-sized principal (subject to change from time to time) may have deposit period up to 6 months. Invested amount cannot be withdrawn (wholly or partially) before the maturity date.
Various Currencies for selection: Many Currencies including HKD, USD, EUR, AUD, NZD, GBP, CAD, JPY and CHF for investor to choose and pair up.
Deposit Amount: Deposit amount can be as low as US$5,000 or equivalent.
Strike Rate: Investor may choose the Strike Rate and the Bank will provide the relevant Contract Interest Rate to him/her for reference.
Return: The final return of CLD depends on the relevant exchange rate prevailing at the fixing time on the fixing date. The fluctuation of foreign exchange rate before the fixing time will not affect the final return.
Fees and Charges: No fees or charges will be paid for investing in a CLD. All fees, charges, operational, administrative and hedging costs incurred by the Bank are already inherently contained and included in the calculation of contract interest rate of a CLD.
Role of Chong Hing Bank: Chong Hing Bank will act as principal in all CLD transactions.
Not a Protected Deposit: CLD is not a protected deposit and is not protected by the Deposit Protection Scheme in Hong Kong. The repayment of CLD is not guaranteed by the Hong Kong SAR Government's Exchange Fund.
Target Investors
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CLD is suitable to investors who:
- believe that the "Linked Currency" will appreciate against the "Deposit Currency" or the Fixing Rate is equal to the Strike Rate when comparing the Fixing Rate (the exchange rate of the currency pair consisting of the Deposit Currency and the Linked Currency at the Fixing Time on the Fixing Date) with the Strike Rate;
- are willing to hold either the Deposit Currency or the Linked Currency;
- are willing to take the exchange rate risk.
How to operate?
Step 1
Choose a currency as "Deposit Currency"
Step 2
Choose another currency as "Linked Currency"
Step 3
Select the Deposit Tenor
Step 4
Determine and Confirm with the Bank the "Strike Rate" and the "Contract Interest Rate"
Step 5
At 2:00pm or about 2:00pm Hong Kong time (as the Bank may reasonably determine with regards to prevailing foreign exchange market conditions) on the Fixing Date, the Bank will compare the "Strike Rate" with the relevant market spot rate ("Fixing Rate"):
Scenario 1: if (1) the Linked Currency has appreciated against the Deposit Currency or (2) the Fixing Rate is equal to the Strike Rate, investor will receive the Principal and the Contract Interest Amount in Deposit Currency on the maturity date.
Scenario 2: if the Linked Currency has depreciated against the Deposit Currency, investor will receive the Principal and the Contract Interest Amount in Linked Currency, being converted from the Deposit Currency at the Strike Rate, on the maturity date.
Enquiry
If you are interested in CLD or want to have more information, please contact the Head Office or any branch of Chong Hing Bank or call our Customer Services Hotline at 3768 6888.
