Premium Deposit

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 Of A Premium Deposit
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.

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 exprienced investor who is not afraid to take on a greater degree of risk versus a safer ordinary time deposit.

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.

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. You should therefore determine whether any foreign currency investments is suitable for you in the light of your investment objectives, your financial means and your risk profile.

The information contained herein does not constitute a solicitation or an offer to enter into a transaction. As this is a non-traditional deposit involving the use of derivatives, you may be exposed to a foreign exchange risk and may sustain losses on your original funds. Therefore, prior to entering into any transaction, you should determine, without reliance on Citibank, N.A. the risks and merits of the transaction and that you are able to assume those risks. In addition, partial withdrawal is not allowed. Premature withdrawal of full deposit amount is also strongly discouraged. Any pretermination costs incurred will be deducted from the deposit. Premium Deposits are not available to U.S. persons.
 
Citibank Privacy Statement
 
Go to Citibank Home PageReturn to
Citibank home page 		Terms, conditions, caveats and small print.
Copyright © Citicorp 1998-1999.