Header navigation:
Currency-Linked Deposit
Offer various currency combinations for you to suit your foreign exchange investment need.
Important Notes:
This is a structured investment product involving derivatives. The investment decision is yours but you should not invest in this product 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.
This product is NOT a protected deposit and is NOT protected by the Deposit Protection Scheme in Hong Kong.
Investment involves risks. You should not invest in this product based on this webpage alone. Before making any investment decision, you should read and understand the relevant offering documents (including but not limited to the Terms and Conditions for One Account or Private Banking Terms and Conditions for Banking and Investment Services (in respect of Private Banking Customers) and Important Facts [More Info]) for further details and the risks involved and carefully consider your financial situation, investment experience and investment objectives. You should seek independent professional advice if needed.
What Is a Currency-Linked Deposit ("CLD") ?
Currency-Linked Deposit comprises of a time deposit and a currency option. When you set up a CLD, you are setting up a time deposit and at the same time selling a currency option. The option premium from the sale of the currency option helps to deliver a yield that is potentially higher than that of time deposit with same tenor.
How Does CLD Work?
To start investing in CLD, you need to:
- Select a Deposit Currency.
- Select a Linked Currency that you expect to appreciate against or stay put with the Deposit Currency.
- Select a Strike Rate.
- Choose a tenor.
Deposit amount and interest at maturity will be paid in either the Deposit Currency or Linked Currency, depending on the Fixing Rate at the fixing time on the fixing date as compared to the Strike Rate:
- If the Linked Currency has strengthened or remains unchanged against the Deposit Currency, you will receive deposit amount and interest in the Deposit Currency.
- If the Linked Currency has depreciated against the Deposit Currency, your deposit amount and interest will be converted to the Linked Currency at the Strike Rate.
What Are the Key Features?
- Minimum deposit amount starts from HK$100,000 (or its equivalent in other currencies).
- 11 major currencies including HKD, USD, AUD, NZD, EUR, GBP, CAD, CHF, JPY, SGD and RMB make up different currency pairs for your choices to suit your investment needs.
- Flexible tenors from 1 week to 3 months.
- Customise the Strike Rate to align with you investment tactics.
- Extensive trading channels through any of our branches, as well as phone banking, i-banking and inMotion.
Scenario Analysis:
The following illustrative examples are hypothetical and provided for illustration purpose only. Scenarios below are not based on past performance of exchange rate of AUD/HKD. The Bank is not making any representation or prediction of future movements of the exchange rates for AUD/HKD or be deemed as projections of future movements in providing the illustrative examples. They do not represent all possible outcomes or describe all possible factors that may affect the payout under CLD. You should not rely on these examples when making an investment decision.
| Deposit Currency | HKD |
|---|---|
| Linked Currency | AUD |
| Deposit Date | 5-May-20XX |
| Fixing Date and Time | 12-May-20XX (3:00pm Tokyo Time) |
| Deposit Maturity Date | 12-May-20XX |
| Tenor | 7 days |
| Strike Rate | 8.3001 (AUD vs. HKD) |
| Interest Rate (p.a.) | 29.47% |
| Deposit Amount | HKD100,000 |
| Basis for calculating interest | 365 days |
| Heading | Scenario 1: (Best case scenario) AUD strengthens against HKD |
Scenario 2: (Gain scenario) AUD remains constant against HKD |
Scenario 3: (Loss scenario) (Note) AUD weakens against HKD |
Scenario 4: (Worst case scenario) (Note) AUD becomes valueless |
|---|---|---|---|---|
| Fixing Rate (AUD vs. HKD) |
8.5001 | 8.3001 | 8.2000 | 0 |
| Deposit Amount and Interest at maturity | HKD 100,565.18 |
HKD 100,565.18 |
AUD 12,116.14 (equivalent to HKD 99,352.35#) |
AUD 12,116.14 (equivalent to HKD0#) |
| Gain / Loss |
A gain of HKD 565.18 |
A gain of HKD 565.18 |
A loss of HKD 647.65 |
A loss of HKD 100,000 |
#Assuming that the customer converts the deposit amount and interest received in AUD to HKD at the Fixing Rate.
Note: Under this scenario, assuming you convert the deposit amount and interest received in the Linked Currency at maturity to the Deposit Currency at the Fixing Rate, customer is then exposed to the currency devaluation risk of the Linked Currency. The loss due to currency devaluation may offset the interest earned on the CLD and may even result in significant losses in the deposit amount of CLD. In the worst case, you may lose your entire deposit amount.
Scenario 5: The Bank becomes insolvent or defaults on its obligations
Assuming that the Bank becomes insolvent during the tenor of this product or defaults on its obligations under this product, you can only claim as its unsecured creditor. In the worst case, you may get nothing back and suffer a total loss of your deposit amount.
Risk Disclosure Statements
The following risk disclosure statements are not exhaustive. You are recommended to seek independent professional advice before making any investment decision. You should carefully consider whether such product is suitable for you in light of your financial situation, investment experience and investment objectives.
Not a time deposit - CLD is NOT equivalent to, nor should it be treated as a substitute for, time deposit. It is NOT a protected deposit and is NOT protected by the Deposit Protection Scheme in Hong Kong.
Derivatives risk - CLD is embedded with FX put option. Option transactions involve risks, especially when selling an option. Although the premium received from selling an option is fixed, you may sustain a loss well in excess of such premium amount, and your loss could be substantial.
Limited potential gain - The maximum potential gain is limited to the interest payment.
Maximum potential loss - CLD is not principal protected: you could lose all of your deposit amount.
Not the same as buying the Linked Currency - Investing in CLD is not the same as buying the Linked Currency directly. During the Deposit Period, you have no rights in the Linked Currency, and movements in the exchange rate of the Linked Currency may not lead to any corresponding change in your return on CLD.
Market risk - The return of CLD is linked to the Fixing Rate prevailing at the fixing time on the fixing date. Movements in exchange rates can be unpredictable, sudden and drastic, and affected by complex political and economic factors. Any such exchange rate movement may adversely affect your financial return or result in a loss under the CLD. If the Fixing Rate is not quoted or is unavailable, the Bank will, acting in good faith and in a commercially reasonable manner, determine the Fixing Rate. In any event the decision of the Bank shall be binding and conclusive.
Liquidity risk - You cannot early terminate the CLD and should be prepared to hold this product until maturity. There is no secondary market for CLD.
Credit risk of the Bank - CLD is not secured by any collateral. You will be exposed to the credit risk of the Bank and will not receive any interest payment or may even lose the entire deposit amount if the Bank becomes insolvent or defaults in performing its obligations.
Currency risk - You are subject to risk of fluctuations in foreign exchange. If the Linked Currency depreciates, you will receive the deposit amount and interest in the Linked Currency at the Strike Rate at maturity. If you convert the amount received in the Linked Currency back to the Deposit Currency, the loss arising from devaluation of the Linked Currency may offset the interest earned on the product, and may even result in significant or even entire losses in the deposit amount of the product. There is a risk that loss may be incurred as a result of investing in the product. If the Deposit Currency and/or Linked Currency is not in your home currency, and you choose to convert it back to your home currency upon maturity, you may make a gain or loss due to exchange rate fluctuations.
Risks relating to RMB - You should note that the value of RMB against other foreign currencies fluctuates and will be affected by, amongst other things, the PRC government’s control (for example, the PRC government regulates conversion between RMB and foreign currencies), which may adversely affect your return under this product when you convert RMB into your home currency. RMB is not freely convertible at present. The actual conversion arrangement will depend on the restrictions prevailing at the relevant time.
Risks of early termination by the Bank - The Bank has the right (but not the obligation) to terminate this product early upon occurrence of certain events. If this product is terminated by the Bank early, you may suffer a substantial loss under this product.
Not covered by Investor Compensation Fund - Currency-Linked Deposit is not covered by the Hong Kong Investor Compensation Fund.
This webpage does not itself constitute any offer of, or invitation by or on behalf of China CITIC Bank International Limited (the "Bank") to any person to purchase or sell or acquire or invest in any investment products.
The Bank is the product issuer, which is an authorized institution under the Banking Ordinance and is regulated by the Hong Kong Monetary Authority.
This webpage is issued by the Bank. Its contents have not been reviewed by the Securities and Futures Commission of Hong Kong.
Already placed CLD before?
Be served by our professional staff at our branches, or opt for self-service banking via our automated channels — the choice is yours.
Careers
We offer a range of rewarding careers from trainee to management level.
Tap into the vast resources and network of our parent bank China CITIC Bank and our ultimate shareholder, CITIC Group Corporation.
China CITIC Bank International is:
Footer links and disclaimer messages:
