High Yield Currency-Linked Deposit
High Yield Currency-Linked Deposit is a time deposit linked with a currency option that aims to offer you higher interest rate and meet your financial needs for foreign currencies. Depending on the market situation and your financial needs, you may be able to get better returns than a regular time deposit.
How does a High Yield Currency-Linked Deposit work?
Simply select a deposit currency (either HKD or USD) and a linked currency (e.g. EUR, GBP, CAD, JPY, AUD, NZD and CHF, etc.) which you may be paid at maturity. You can choose a deposit period of 1 week, 2 weeks, 1 month, 2 months, 3 months, 6 months and 1 year. We will fix an interest rate and a strike rate will be fixed at the time when the deal is made. At maturity, the Deposit and its earning will be paid in either deposit currency or linked currency whichever has depreciated against the other.
Illustration
Deposit Currency |
USD |
Linked Currency |
AUD |
Deposit Amount |
USD100,000 |
Trade Date |
11 July |
Effective Date |
13 July |
Determination Date |
18 July |
Maturity Date |
20 July |
Linked Currency |
7 days |
Interest Rate |
18.37% |
Strike Rate |
AUD/USD 0.7420 |
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On the Determination Date,
- if the AUD/USD exchange rate is higher than or equal to 0.7420, you will receive principal and interest in USD at maturity.
- if the AUD/USD exchange rate is lower than 0.7420, you will receive principal and interest in AUD at maturity.
Comparision between a High Yield Currency-Linked Deposit and a regular time deposit
(for a period of 1 week with a principal amount of USD100,000)
Type of Deposit |
Interest Rate2 |
AUD/USD Exchange Rate on the Determination Date |
P+I at Maturity |
USD Equivalent at Maturity3 |
Profit / (Loss) |
| High Yield Currency-Linked Deposit |
18.370%p.a. |
0.7440 |
USD100,357.19 |
USD100,357.19 |
USD357.19 |
0.7420 |
USD100,357.19 |
USD100,357.19 |
USD357.19 |
0.7400 |
AUD135,252.28 |
USD100,086.69 |
USD86.69 |
0.7380 |
AUD135,252.28 |
USD99,816.18 |
(USD183.82) |
| USD Time Deposit |
2.4300%p.a. |
N/A |
USD100,047.25 |
USD100,047.25 |
USD47.25 |
| AUD Time Deposit1 |
4.5125p.a. |
0.7440 |
AUD134,889.14 |
USD100,357.52 |
USD357.52 |
0.7420 |
AUD134,889.14 |
USD100,087.74 |
USD87.74 |
0.7400 |
AUD134,889.14 |
USD99,817.96 |
(USD182.04) |
0.7380 |
AUD134,889.14 |
USD99,548.19 |
(USD451.81) |
- Assume the exchange rate of AUD/USD is 0.7420 on the deposit date.
- The interest rate are quoted as of 11 July 2005 and are for reference only. They do not represent the actual returns, if any.
- Assume the exchange rate of AUD/USD on the maturity date is the same as that on the determination date.
High Yield Currency-Linked Deposit Return & Risk Analysis
Minimum Deposit Amount
The minimum deposit amount for High Yield Currency-Linked Deposit is just HKD50,000 or USD10,000 (or its equivalent in any other foreigh currency).
Tailor-made Deposit to Suit Your Needs
We understand that a standard deposit may not fit all customers, that's why we also offer tailor-made High Yield Currency-Linked Deposit. If your deposit amount reaches HKD200,000, USD30,000 (or its equivalent in any other foreigh currency) or above, you can specify the strike rate, deposit period and the currencies that will fit your unique needs.
Greater Flexibility with Overdraft Facility
If you require additional cash during the deposit, we can offer you an overdraft facility that allows you to manage your finances with greater ease and flexibilty, and at the same time enjoy higher returns from the deposit.
How to find out more
Risks Disclosure
- The above information is for reference only and does not constitute any offer or solicitation to subscribe or redeem.
- You should be aware that High Yield Currency-Linked Deposit is not the same as regular time deposit and carry risks not normally associated with regular time deposit and therefore it should not be treated as a substitute for regular time deposit.
- The returns on High Yield Currency-Linked Deposit are limited to the predetermined interest amount and will depend on the market conditions prevailing on the determination date.
- The investment in the High Yield Currency-Linked Deposit carries the risk of exchange rate fluctuation of the linked currency, leading to the possible loss of some or all of the principal and interest amount.
- High Yield Currency-Linked Deposit cannot generally be cancelled or withdrawn prior to the agreed maturity date without the consent of the Bank.
- High Yield Currency-Linked Deposit is not a protected deposit and is not protected by the Deposit Protection Scheme in Hong Kong.
- You should perform your own due diligence on this investment or seek independent tax, accounting, legal, regulatory, financial and other professional advice prior to the placement of the High Yield Currency-Linked Deposit.
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