| Wide choice of currency combinations available
We have 9 choices of currency deposits to suit your needs: HKD, USD, EUR, JPY, GBP, AUD, NZD, CAD and CHF, with more than 70 different currency combinations including different cross rate combinations that can help you capture greater yield opportunities in the foreign exchange market.
Flexible deposit periods
Our varied selection of deposit periods offers you 1 week, 2 weeks, 1 month, 2 months or 3 months deposit periods to suit your investment horizon.
Low minimum deposit requirement
The minimum deposit amount is HKD100,000 only.
No fee will be charged
No annual or maintenance fees will be charged.
How does Premium Deposit work?
When you set up your Premium Deposit, you need to decide on the deposit currency, linked currency, deposit tenor and conversion rate.
DBS Bank will set the fixing rate with reference to the foreign exchange spot rate in the inter-bank market at around 11:00 a.m. on the maturity date. The Bank will compare the fixing rate with the conversion rate to determine whether the principal and interest will be paid back in the deposit currency or linked currency.
Premium Deposit return and risk comparison
Illustration
On deposit value date
| Deposit Currency |
Hong Kong Dollar (HKD) |
| Deposit Amount |
HKD500,000 |
| Linked Currency |
Australia Dollar (AUD) |
| Deposit Value Date |
23 November 2010 |
| Deposit Tenor |
1 month |
| Deposit Maturity Date |
23 December 2010 |
| Spot Rate (AUD/HKD) |
7.6239 |
| Conversion Rate (AUD/HKD) |
7.3898 |
| Premium Deposit Rate (p.a.) |
7% |
On deposit maturity date
| Scenario 1 - |
HKD has depreciated against AUD or remains unchanged during the deposit period, fixing rate (AUD/HKD) is higher than or equal to conversion rate |
| Fixing Rate (AUD/HKD) |
7.4800
(i.e. higher than conversion rate 7.3898) |
| Payout Currency |
HKD |
| Deposit Amount |
HKD500,000 |
| Interest Amount* |
HKD500,000 x 7% x 30/365
= HKD2,876.71 |
| Principal and Interest on Maturity Date |
HKD500,000 + HKD2,876.71
= HKD502,876.71 |
| Gain (Loss) |
Gain HKD2,876.71 |
| Scenario 2 - |
HKD has appreciated against AUD during the deposit period, fixing rate (AUD/HKD) is lower than conversion rate |
| Fixing Rate (AUD/HKD) |
7.3400
(i.e. lower than conversion rate 7.3898) |
| Payout Currency |
AUD |
| Deposit Amount |
HKD500,000 |
| Interest Amount* |
HKD500,000 x 7% x 30/365
= HKD2,876.71 |
| Principal and Interest on Maturity Date |
(HKD500,000 + HKD2,876.71) /
conversion rate 7.3898
= HKD502,876.71 / 7.3898
= AUD68,050.11 |
Customer can choose to retain the deposit in AUD or convert AUD into HKD at spot rate. Assuming the customer converts the AUD back to HKD at the fixing rate on the maturity date, customer will receive:
AUD68,050.11 x fixing rate 7.3400 = HKD499,487.81 |
| Gain (Loss) |
Loss (HKD512.19) |
| * |
The interest amount in HKD is calculated at the relevant interest rate on the basis of the actual number of days elapsed in an interest period and a 365-day year. |
Comparison with normal time deposit
| |
Scenario 1 |
Scenario 2 |
Normal
Time Deposit |
| Principal Amount |
HKD500,000 |
| Deposit Tenor |
1 month |
| Interest Rate (p.a.) |
7% |
7% |
0.1000% |
| Fixing Rate |
7.4800 |
7.3400 |
N/A |
| Principal & Interest on Maturity Date |
HKD502,876.71 |
AUD68,050.11 |
HKD500,041.10 |
| Amount in HKD at Fixing Rate |
N/A |
HKD499,487.81 |
N/A |
| Gain (Loss) |
Gain
HKD2,876.71 |
Loss
(HKD512.19) |
Gain
HKD41.10 |
Seize this investment opportunity
Take hold of this potentially high yield investment opportunity by choosing the deposit and linked currency pairs, deposit tenor and conversion rate that best suit your outlook on foreign exchange market trends.
Benefit from our FX expertise
No matter how close you are to the market, professional advice always adds value. At DBS, you can always arrange for an appointment to meet our Treasury Specialist to help you make informed decisions.
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